Treasury Yields Fall on Hormuz Reopening News

US 10 Year Government Bond Yield decreased to 4.23%, the lowest since March 2026. Over the past 4 weeks, US 10 Year Note Bond Yield lost 2.70 basis points, and in the last 12 months, it decreased 16.70 basis points.

The yield on the US 10-year Treasury note fell by nearly 7 basis points to around 4.25% on Friday, approaching one-month lows, as news of the temporary reopening of the Strait of Hormuz helped ease inflation concerns, at least in the short term. Iran’s Foreign Minister, Abbas Araghchi, confirmed that the strait is now fully open to all commercial vessels for the duration of the 10-day ceasefire. In response, oil prices tumbled more than 10%, prompting traders to increase bets on Federal Reserve rate cuts this year. Markets are now pricing in roughly a 50-50 chance of a 25-basis-point rate cut by year-end, up from about a 30% probability on Thursday. This compares with earlier expectations of two rate cuts before the conflict escalated.

The yield on the US 10-year Treasury note edged down to around 4.3% on Friday, as investors grew more optimistic that a deal between the US and Iran could be reached in the near term. US President Trump said it is “looking very good” that an agreement is within reach, adding that talks may resume over the weekend. He also claimed, without providing evidence, that Iran had agreed to terms it has previously resisted. Geopolitical tensions showed tentative signs of easing, with Israel and Lebanon agreeing to a 10-day ceasefire. However, the Strait of Hormuz remains largely closed, keeping oil prices elevated above $90 per barrel, roughly one-third higher since the conflict began in late February. Against this backdrop, market expectations for monetary policy have shifted. Traders now anticipate the Federal Reserve will hold interest rates steady through 2026, a notable change from earlier expectations of two rate cuts before the conflict escalated.