Treasury Yields March Higher

The yield on the US 10-year Treasury note edged up to approach 4.37% on Tuesday, the highest in about a week, as oil prices continue to rise amid escalating tensions between the US and Iran. President Trump warned that, unless his conditions including the reopening of the Strait of Hormuz are met by 8 p.m. Eastern Time, the US could target key Iranian infrastructure. He later intensified his rhetoric, stating that “a whole civilization will die tonight” unless Iran’s leadership agrees to a deal that includes reopening the Strait. Meanwhile, reports indicate that Iran has halted negotiation efforts with the US. On the data front, consumer inflation expectations rose in March, while the logistics sector experienced a notable increase in transportation costs. Looking ahead, the release of US March CPI data on Friday is expected to provide further insight into price pressures potentially linked to the ongoing conflict.

The yield on the US 10-year Treasury note traded around 4.35% on Tuesday, hovering near one-week highs, as traders assess developments in the Middle East and the approach of President Trump’s deadline for Iran to reach a deal. President Trump warned that, unless his conditions including the reopening of the Strait of Hormuz, are met by 8 p.m. Eastern Time, the US could target key Iranian infrastructure such as power plants and bridges, although he added that talks with Tehran are progressing well. Oil prices remained near 2022 highs, and concerns about its impact on inflation linger. Traders also await the release of US March CPI data on Friday, which should provide further insight into price pressures linked to the conflict. Markets currently expect the Federal Reserve to leave the fed funds rate unchanged at its meeting later this month, with no policy adjustments anticipated for the remainder of the year.

The yield on the US 10-Year Treasury note rose to around 4.35% on Tuesday, advancing for a second straight session as President Trump’s threat to escalate attacks on Iran overshadowed optimism surrounding ceasefire talks. Trump warned of strikes on Iranian power plants and bridges unless his conditions, including reopening the Strait of Hormuz, are met by 8 p.m. Eastern Time, though he noted that ongoing discussions with Tehran are progressing. Meanwhile, reports on Monday indicated that the US, Iran, and regional mediators are working toward a potential 45-day ceasefire and that more vessels are transiting Hormuz. Investors now turn to US durable goods orders data due Tuesday, along with inflation figures and the latest FOMC minutes later this week for further insight into economic conditions. Markets have fully priced in that the Federal Reserve will keep the federal funds rate unchanged later this month, with borrowing costs expected to remain steady through the rest of the year.