U.S. Treasury yields were lower on Friday as investors ran for safety following a threat from President Donald Trump on higher tariffs targeting Chinese goods.
The 10-year Treasury was down more than 9 basis points at 4.057%, while the 2-year Treasury yield was more than 7 basis points lower at 3.526%. The longer-maturity 30-year Treasury yield dropped more than 9 basis points to 4.638%.
One basis point is equal to 0.01% and yields and prices move in opposite directions.
In a Truth Social post, Trump threatened to put forward a "massive increase of Tariffs" on goods from China, adding that Chinese President Xi Jinping was "becoming very hostile, and sending letters to Countries throughout the world, that they want to impose export controls on each and every element of production having to do with rare earths."
Stocks tanked following the post, with investors running away from riskier assets. Gold also jolted higher.
The threat adds to the uncertainty investors face, as they also wade through a U.S. government shutdown that made it into its 10th day. On Thursday, the Senate failed to advance stop-gap funding bills for the seventh time, with Republican and Democratic lawmakers appearing unwilling to give up on their own party's demands.
The shutdown has resulted in an economic data blackout which leaves investors "flying blind to some extent on the US economy," Deutsche Bank analysts said in a note.
Instead, investors turned to the Federal Open Market Committee minutes for clues about the shape of the economy this week, which revealed that officials last month were mostly in agreement on lowering interest rates but split on just how many reductions there should be this year.
Fed Governor Christopher Waller told CNBC Friday that while he still supports cutting rates, the central bank needs to be "cautious about it."