FX.co ★ US 10-Year Yield Steadies Ahead of US-Iran Talks

The yield on the US 10-year Treasury note was little changed around 4.29% on Friday, as investors shifted focus to diplomatic talks in Islamabad this weekend. Vice President JD Vance is set to lead a US delegation in negotiations with Iranian officials.

Treasury yields have moved lower over the week after a two-week US–Iran ceasefire drove a sharp decline in oil prices, easing worries about a renewed inflation surge and the need for additional interest rate hikes. Even so, sentiment remained cautious amid Israeli strikes in Lebanon and persistent shipping constraints in the Strait of Hormuz, both of which threaten to complicate the fragile talks.

On the macroeconomic front, markets were awaiting the release of the March CPI report later today for new indications of how the Middle East conflict is feeding into price pressures. Minutes from the FOMC’s March meeting showed that policymakers remained concerned the war could keep inflation elevated and might necessitate further policy tightening, although they still penciled in one interest rate cut for this year.