*

Trump says US will have total, permanent access to

Greenland

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Even with Greenland deal, caution persists -strategist

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US data mixed, inflation benign, but little rates reaction

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US yield curve continues to flatten, as tariff risk off

for now

By Gertrude Chavez-Dreyfuss

NEW YORK, Jan 22 (Reuters) - U.S. Treasury yields rose

on Thursday, but remained confined to a narrow range, as

investors prepared for bouts of volatility and awaited clarity

on the Greenland framework deal negotiated by President Trump

with European ‌leaders.

Trump said on Thursday he had secured total and permanent U.S.

access to Greenland in a deal with NATO, whose head said allies

would have to step up their commitment ​to Arctic security to

ward off threats from Russia and China.

His comments came a day after Trump withdrew his tariff

threats ‍on European goods and ruled out taking Greenland by

force. That calmed bond investors who ⁠had sold Treasuries the

last few ⁠days amid global tension between the United States and

Europe.

"A little bit of the policy shock has been taken off the

table, but only for the moment. And ‌it is a relief, but at the

same time, it increased the ​market's wariness around the

potential for this to happen again," said Tony Rodriguez, head

of fixed income strategy at Nuveen.

"They're currently discussing a framework for Greenland but

this can easily go off the rails. So geopolitical ⁠risk from

tariffs specifically from a policy perspective is probably going

to ‍remain a risk ​factor for the market, more than people thought

maybe a month ago."

In late morning trading, the benchmark U.S. 10-year yield

rose 1.6 basis points (bps) to 4.271%, after

climbing on Tuesday to its loftiest level since late August.

U.S. 30-year ‍bond yields were slightly up at 4.871%

. On Tuesday, they rose to their highest since early

September.

On the front end of the curve, the U.S. 2-year yield was up

2.4 bps at 3.621%.

Thursday's U.S. economic reports were mixed, but had little

impact on Treasuries.

Data showed the number of Americans filing new applications for

unemployment benefits increased marginally last week by 1,000 to

a seasonally adjusted 200,000 for the week ended January 17.

Economists polled by Reuters had forecast 210,000 claims for the

latest week.

A separate report from ​the Commerce Department's ‍Bureau of

Economic Analysis showed GDP increased at an upwardly revised

4.4% annualized rate, the fastest pace since the third quarter

of 2023. The economy was initially estimated to have grown at a

4.3% rate in the July-September quarter. ​It grew at a 3.8% pace

in the second quarter.

In other parts of the bond market, the yield curve continued

to flatten on Thursday as the threat of tariffs was off the

radar for now. The spread between two-year and 10-year yields

narrowed to 64.8 bps from 65.4 bps the previous session.

It had steepened to as much as 70.9 bps on

Tuesday, the largest gap in roughly two weeks, reflecting market

concerns about sticky inflation.

Data, however, showed generally benign inflation numbers for

October and November amid a government shutdown.

The PCE price index grew 0.2% in November, matching ​October's

gain. In the 12 months through November, the PCE price index

climbed 2.8% after rising 2.7% in October.

Excluding the volatile food and energy components, the PCE

price index rose 0.2%, with the same margin in October. In the

12 months through November, the so-called core inflation

increased 2.8% after advancing 2.7% in October.

Analysts, however, ‍said inflation numbers are currently

expected to come in at a stronger pace in December.