U.S. Treasury yields rose on Tuesday as investors awaited developments on negotiations between the U.S. and Iran, which hit an impasse over the weekend.
The yield on the 10-year U.S. Treasury note — the key benchmark for U.S. government borrowing — rose more than 2 basis points at 4.356%.
The 2-year Treasury note yield, which more closely tracks short-term Federal Reserve interest rate policy, was over 1 basis point higher at 3.822%. The longer-dated 30-year Treasury bond yield was up over 1 basis point at 4.960%.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
President Donald Trump and his national security team discussed Iran’s proposal to reopen the Strait of Hormuz if the U.S. lifts its blockade and the war ends, White House press secretary Karoline Leavitt confirmed on Monday.
The proposal would postpone negotiations on Tehran’s nuclear ambitions for a later date, Axios and The Associated Press reported earlier in the session.
It’s unclear whether Trump, who has vowed not to lift the blockade until a deal with Iran is “100% complete,” entertained the reported offer to end the two-month-old war. Oil prices edged higher overnight as uncertainty lingered over the outcome of the war.
Meanwhile, investors will also be looking ahead to the Fed’s monetary policy meeting on Wednesday, during which outgoing Fed chair Jerome Powell is widely expected to keep interest rates on hold.
The European Central Bank (ECB) and Bank of England (BOE) are also due to hold pivotal meetings as the war upends inflation and growth expectations.
The two central banks will both publish their latest monetary policy decisions on Thursday, with economists expecting the central banks to stand pat on their benchmark interest rates at their respective meetings this month, but will leave the door open to hikes later this year.
— CNBC’s Holly Ellyatt also contributed to this report.
About The Author
