Treasury Yields Lower as Oil Prices Sink

2026-04-08 13:34 By Joana Taborda 1 min. read

The yield on the US 10-year Treasury note fell about 5bps to 4.25% on Wednesday, reaching its lowest level in roughly three weeks.

The decline followed news of a two-week ceasefire between the US and Iran, which triggered a sharp drop in oil prices, easing concerns about an inflationary spiral and boosting expectations that the Federal Reserve could cut interest rates this year.

Markets now see around a 60% chance of a rate cut by year-end, compared with almost no chance at the start of the week.

Before the conflict began, markets had priced in more than two rate reductions.

As part of the temporary truce, Iran said it would allow ships to pass through the Strait of Hormuz, helping to alleviate concerns over energy supply disruptions.

Investors will also scrutinize the FOMC minutes later in the day for further insight into the Fed’s policy outlook, while the release of US March CPI data on Friday is expected to provide additional clues on price pressures linked to the ongoing conflict.



News Stream
US 10-Year Yield Holds Steady
The yield on the US 10-year Treasury note hovered around 4.6% on Tuesday, pausing its recent climb as renewed optimism surrounding a potential US-Iran agreement eased concerns about inflation and further interest rate hikes. President Donald Trump said he suspended a planned strike on Iran scheduled for Tuesday after appeals from Saudi Arabia, Qatar, and the UAE, adding that the Gulf nations believed a deal with Tehran acceptable to Washington could still be achieved. Even so, the benchmark yield remained near its highest levels in more than a year as elevated oil prices linked to the Middle East conflict and accelerating US inflation led traders to rule out Federal Reserve rate cuts this year, while also boosting speculation that the Fed could still raise rates before year-end. Investors are now awaiting the latest FOMC minutes and flash US PMI data for additional clues on the outlook for monetary policy and economic activity.
2026-05-19
US Treasury Yields Reverse Early Decline
The yield on the US 10-year Treasury note fluctuated around 4.6% on Monday, recovering from a brief pullback as traders continued to assess developments in the Middle East and persistent uncertainty over whether a US-Iran agreement can be reached in the near term. Iranian media reported that Washington had proposed a temporary waiver of oil sanctions until a final deal is reached but later Axios reported that Iran has given an updated proposal for a deal to end the war, but the White House believes it is not sufficient for a deal. The benchmark Treasury yield remained near one-year highs, supported by persistently elevated oil prices that continue to fuel global inflation pressures and constrain central banks’ ability to ease monetary policy. Markets currently expect the Fed to leave the fed funds rate unchanged through year-end, though the implied probability of an additional 25bps rate hike has risen to around 40%.
2026-05-18
Treasury Yields Little Changed
The yield on the US 10-year Treasury note swung around 4.6% on Monday amid fresh signs of progress in US-Iran negotiations. Iranian media reported that Washington had proposed a temporary waiver of oil sanctions until a final deal is reached, while separate reports suggested Tehran could accept a long-term freeze on its nuclear program. Still, benchmark Treasury yields remained near one-year highs, supported by persistently elevated oil prices that continue to fuel global inflation pressures and constrain central banks’ ability to ease monetary policy. In some cases, policymakers may even need to tighten further. Markets currently expect the Fed to leave the fed funds rate unchanged through year-end, though the implied probability of an additional 25bps rate hike has risen to around 40%. Investors also await the upcoming FOMC meeting minutes and flash US PMI data for further signals on the direction of monetary policy and the broader economic outlook.
2026-05-18