At around 10:55 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 2.433%, while the yield on the 2-year Treasury note was also lower at around 2.235%. The yield on the 3-month bill hovered at 2.431%.
The yield on the 10-year Treasury note briefly dipped under that of the 3-month Treasury bill on Thursday, inverting part of the yield curve. An inversion has been a reliable recession indicator in the past, though there is a debate over which segment of the curve is most important.
Despite the heated rhetoric, the fixed-income response Friday morning was largest contained, suggesting to some that the market had already foreseen a scuttled deal.
"The muted overnight response to Trump's latest round of tariffs suggests the eventuality was fully priced in," Ian Lyngen, head of U.S. rate strategy at BMO Capital Markets, said in a note. "The White House's 15% add-on to the present tariff structure has left us to ponder how that will translate into realized inflation during the balance of the year."
The Labor Department said its consumer price index, a gauge of the prices Americans pay for everything from toaster ovens to gasoline, rose 0.3% in April, falling just short of economist expectations.
The government said in a release Friday that much of the tick upward in consumer prices in April was due to higher gasoline and rent costs. The department's gasoline index continued to increase, rising 5.7 percent and accounting for over two-thirds of the seasonally adjusted all items monthly increase.
Excluding volatile food and energy categories, prices rose 0.1%, the same pace as in March. Overall prices rose 2% on a year-over-year basis, the first time CPI inflation has been at or above the 2% mark since November.
— CNBC's Silvia Aramo contributed reporting.