Treasury yields are little changed as investors weigh the state of the U.S. economy

U.S. Treasury yields ended the week with little change as concerns over trade and geopolitical tensions subsided, shifting investor focus to the Federal Reserve's upcoming policy meeting.

The benchmark 10-year Treasury yield dipped slightly to 4.235%, while the 30-year yield settled at 4.834%. The 2-year note yield also edged lower to 3.598%.

The calm in bond markets followed a de-escalation in international friction after U.S. President Donald Trump called off threatened tariffs against eight European countries on Wednesday. The move came after Trump announced a "framework of a future deal" regarding Greenland with NATO Secretary General Mark Rutte.

With the economic data calendar light, attention now turns to the Federal Reserve's interest rate decision on January 28. Markets widely expect the central bank to hold rates steady, with traders currently pricing in only two quarter-point cuts for all of 2026.

"Signs of a rebounding labor market aren't going to give the Fed any urgency to continue lowering rates in the short term," noted Ian Lyngen, head of U.S. rates strategy at BMO Capital. He added that the economy's mixed signals and uncertain trajectory leave the macroeconomic narrative "vulnerable to sweeping shifts" as new data emerges.