Trump told aides he wants to move ahead on a plan to impose tariffs on Chinese imports, Bloomberg News reported, further ratcheting up trade tensions between the world's two largest economies.

Treasuries have benefited from rising trade tension, as investors see them as a safe-haven investment, and as the most likely beneficiary of Trump's protectionist policies. The yield on the 10-year Treasury note fell 1.5 basis points as prices rose following the trade news, and was last at 2.859 percent.

Yields also fell after inflation data only just met the Federal Reserve's target of 2 percent, and as Argentina's central bank hoisted its benchmark interest rate 15 percentage points to 60 percent, pulling the country's peso down 15.8 percent and sending emerging market investors to safer places.

"The market is taking its cues from risk assets," said Lisa Hornby, US fixed income portfolio manager at Schroders.

The move may be exaggerated, however, said Hornby. "We're ahead of the Labor Day holiday so liquidity is more constrained and these moves you're seeing in emerging markets are probably being exacerbated by the lack of people in the office."

The Fed's preferred inflation measure, the personal consumption expenditures price index excluding the volatile food and energy components, or core PCE, rose 0.2 percent in July after edging up 0.1 percent in June, the US Commerce Department reported on Thursday. That lifted core annual PCE to 2.0 percent, from 1.9 percent in June.

The rate of inflation, however, only just hit the central bank's target. "It was a low 0.2 percent for core PCE at just 0.156 percent," said Ian Lyngen, head of US rates strategy at BMO Capital Markets. A "near miss some might say, and a troubling trajectory for the Fed to be sure."

The 30-year bond yield was down 1.5 basis points from the close on Wednesday, last at 3.005 percent.

The yield on the two-year note was down 2 basis points from yesterday's close, last at 2.657 percent. The spread between two- and 10-year note yields, the yield curve, was mostly unchanged at 20.6 basis points from its close at 20.7 on Wednesday.