US 10-year yield falls from 18-month high on Iran peace talk hopes

Synopsis

U.S. Treasury yields saw a decline on Monday as oil prices plummeted. President Donald Trump's recent announcement about renewed discussions with Iran helped ease inflation concerns, pushing U.S. crude prices down to below eighty dollars per barrel. Consequently, the benchmark ten-year Treasury yield fell from an eighteen-month peak, and the two-year yield also saw a substantial drop.

The benchmark ​U.S. 10-year Treasury ​yield fell from an 18-month ​high on Monday as oil prices dropped after U.S. President Donald Trump ‌said talks ⁠with Iran ⁠would restart, easing fears that ​the conflict could lock in higher inflation.

Iran ​has choked off traffic in the Strait of Hormuz, a conduit ​for 20% of ⁠the world's ‌oil and liquefied ​natural ​gas before the start of ⁠the war, causing energy prices ​to rise and stoking broader inflation.

Renewed optimism about a deal pushed U.S. crude futures below $80 per barrel on Monday, supporting U.S. Treasuries and pushing yields ‌lower.

The 10-year yield was last down 5.5 basis points (bps) at 4.69%, ⁠after hitting its highest since January 2025 on Friday of 4.747%.

The two-year yield, ​which is sensitive to changes in Federal Reserve policy expectations, fell 4 bps to 4.25%.

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