FX.co ★ US 10Y Yield Holds Decline

The yield on the 10-year US Treasury note hovered near recent lows around 4.29% on Tuesday, as prospects for continued US–Iran talks helped ease inflation concerns. Although negotiations over the weekend ended without an agreement—prompting President Donald Trump to announce a blockade of Iranian oil shipments—he later said that Tehran had reached out and was seeking to resume discussions.

Expectations for a longer-term ceasefire and a possible reopening of the Strait of Hormuz put downward pressure on oil prices, softening inflationary forces and tempering market bets on a more hawkish Federal Reserve. At the same time, Fed Governor Stephen Miran noted that the energy shock linked to the Iran conflict has not yet filtered into longer-term inflation expectations, and reiterated his view that price pressures should return to the central bank’s target within a year.