Treasury yields moved higher following the announcement of a “phase one” deal agreed to in principle between the U.S. and China on Thursday. However, what yields will do in 2020 will depend on who you ask.

“Investors are split about the direction of government-bond yields in 2020, a sign of confusion about the course of the economy and monetary policy,” wrote Daniel Kruger in the Wall Street Journal. “Economists surveyed last month by The Wall Street Journal predicted that the yield on the benchmark 10-year Treasury note could end next year above 3% or just slightly higher than 1%. The average forecast of 1.97% was only modestly higher than where the yield settled Wednesday, at 1.786%.”

As phase one of the deal comes into fruition, what happens with the rest of a trade agreement could also be a major mover in 2020. For now, however, Wall Street is cheering the latest developments in the U.S.-China trade war saga.

Per a CNBC report, “The Trump administration has reached a “phase one” trade deal with China in principle, pending approval from President Donald Trump, three sources told CNBC on Thursday. The White House has offered to scrap its next round of tariffs on Chinese goods set to take effect Sunday and slash some existing duties in half, two sources told CNBC. The U.S. proposed cutting existing tariffs on $360 billion in Chinese products by 50%.”

Fed Stands Pat on Rates

Where yields will head in 2020 will also by a byproduct of what the Fed decides to do with interest rates.

As widely expected by the capital markets, the central bank stood pat on rates Wednesday after three consecutive rate cuts. The Fed cited better-than-expected employment figures and a bottoming out of soft manufacturing data to substantiate the move to keep rates unchanged.

“The Committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective,” the Fed statement said.

“The Fed succeeded in making today’s FOMC statement as uneventful as possible,” wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group. “Take all with a grain of salt and the same can be said for any 2020 forecast but particularly the Fed’s. Also, because of these forecasts being about on trend, their fed funds rate median projection is for no change in policy.”

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