Investors who bought this week's Treasuries selloff are seeing gains after President Donald Trump retreated from his threat to impose new tariffs on European nations. The reversal came as part of his broader push to acquire Greenland, calming fears of a transatlantic trade war that had sparked the initial bond market volatility.

Trump's softened stance on tariffs directly impacts the Federal Reserve's policy outlook. Reduced trade tensions ease inflation pressures, giving the central bank more room to consider rate cuts. This shift benefits bond holders, as lower yields become more likely, driving prices higher for those who purchased during the recent dip.

Markets will now watch for formal negotiations over Greenland and any follow-through on trade discussions. The episode underscores how geopolitical headlines can swing Treasuries quickly, rewarding nimble investors who interpret policy shifts before they solidify. Further clarity on the administration's priorities could set the tone for the next quarter.