FX.co ★ US 10-Year Yield Eases from 18-Month High

The yield on the 10-year US Treasury note declined to 4.65% on Tuesday, down from an 18‑month high of 4.75% in the previous session, as easing energy prices reduced the perceived risk of higher inflation and a more hawkish response from the Federal Reserve.

Qatari officials said the United States and Iran were close to agreeing on a short‑term deal that would pause the conflict, and US Treasury Secretary Bessent indicated that an announcement could come imminently. These developments pushed fuel and natural gas prices further lower, helping to contain the risk that energy‑driven inflation would continue to feed into broader consumer prices, as had been evident in second‑quarter data.

In response, rate traders pared back bets on an interest rate hike at the Federal Reserve’s next meeting, though a move remained modestly priced in. Even so, yields stayed above the levels seen before the Fed’s decision to hold rates steady last week, when Chair Warsh’s reluctance to endorse a rate hike as his preferred tool against inflation had stoked concerns about mounting price pressures.