FX.co ★ US 10Y Yield Eases on Ceasefire Hopes

The yield on the 10-year US Treasury note declined to around 4.35% on Wednesday, retreating from eight-month highs amid reports that Washington was pursuing talks with Iran to end the conflict. President Donald Trump said Iran had made a gesture of goodwill in discussions related to energy flows through the Strait of Hormuz. Israeli media also reported that the US was seeking a one-month ceasefire to enable negotiations, while the New York Times said Washington had sent Tehran a 15-point proposal to resolve the crisis. However, investors remained cautious, as Iranian officials denied any negotiations with the US and Gulf states signaled they were prepared to join the war against Iran. Oil prices eased on these developments, offering some relief to markets worried that surging energy costs could stoke inflation and force additional interest rate hikes. At the same time, Federal Reserve Governor Michael Barr noted that the central bank may need to keep interest rates elevated for an extended period to bring inflation under control.