Treasury yields slide after Memorial Day break
Treasury yields fell on Tuesday as bond markets boosted hopes for a Middle East peace deal from the Memorial Day holiday despite the U.S. military launching new strikes on Iran.
yield on 10-year US Treasury The rating, the key measure of U.S. government debt, fell more than 6 basis points to 4.510%.
2 year Treasury The bond yield, which more closely tracks short-term Federal Reserve interest rate policy, fell more than 6 basis points to 4.066%. longer dated 30 years of Treasury The bond yield fell more than 5 basis points to 5.028%.
One basis point equals 0.01%, and yields and prices move in opposite directions.
Yields fell across the board, matching the big declines seen in European sovereign bond yields on Monday.
But European bonds made some gains on Tuesday as investors gave mixed signals about the status of U.S.-Iran peace talks.
US forces carried out attacks in southern Iran early Tuesday that Central Command described as “self-defense.” Secretary of State Marco Rubio, who is in India, said that the Strait of Hormuz will eventually have to be opened “one way or another.”
Iran’s Islamic Revolutionary Guard Corps said Tuesday it would retaliate for violations of an ongoing ceasefire after detecting and setting fire to U.S. drones and an F-35 fighter jet entering the country’s airspace.
The apparent flare-up in hostilities comes even as President Donald Trump previously stated in a post on TruthSocial that a peace deal could be on the horizon, with negotiations “progressing well.”
Looking ahead, investors will be watching a host of economic data released later this week, including April readings of the Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred measure of assessing inflation.
Bank of America is forecasting a 0.4% increase from March and a 3.8% increase in annual PCE.
— CNBC’s Lim Hui Jie and Hugh Leask also contributed to this report.
