The April inflation numbers show that prices did not jump significantly as President Trump imposed higher tariffs and then in many cases delayed them, but the longer term is still uncertain, and the market response to the back and forth over trade has been volatile, especially when it comes to the bond market.

Our economics correspondent Paul Sal Salman, explains.

Yesterday we achieved a total reset with China.

The news this week that China and the U.S. agreed to pause the tariff war was a boon for investors,

so anxious of late that the president had already paused most tariffs last month.

They were getting a little bit yippy, a little bit afraid.

Yips, originally a golf term for anxiety on the links.

The day the president was referring to, investors in the bond market who buy and sell

U.S. government IOUs called bonds or treasury securities.

Here's longtime market maven Ed Yardini to explain.

Well, treasury securities are the debt instruments that are issued by the U.S. Treasury to pay

for the spending of the United States government that isn't covered by taxes.

Finance professor Laura Veldkamp puts it this way. A bond is an IOU that the U.S.

government issues, and it promises to pay the buyer of that bond back in the future for the money

that is borrowed with interest. How much interest depends on a few things. The maturity of the IOU,

30 days a year, 10 years 30. That is, how long before the U.S.

is obliged to pay you back what it borrowed? Expected inflation in the meantime, you don't want

to be holding an IOU paying 2% a year, say when inflation is, I don't know, 5% since you'd lose

money every year. The likelihood the U.S. is going to stiff you and default.

But ultimately, the interest rate depends on buyer demand.

If the buyers are really eager to buy U.S. government bonds,

they might be willing to take them with a low rate of interest.

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