People attending the meeting of the Board of Governors of the Federal Reserve in Washington DC.
getty images
US Treasury yields rose on Tuesday as investors awaited developments in talks between the US and Iran, which were deadlocked over the weekend.
The yield on the 10-year US Treasury note – the key benchmark for US government borrowing – rose 1 basis point to 4.346%. The 2-year Treasury note yield, which more closely tracks short-term Federal Reserve interest rate policy, was up 3 basis points at 3.836%.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
President Donald Trump and his national security team discussed Iran’s proposal to reopen the Strait of Hormuz if the US lifts its blockade and the war ends, White House press secretary Carolyn Leavitt confirmed on Monday.
The proposal would postpone talks on Tehran’s nuclear ambitions to a later date, Axios And The Associated Press Informed.
It is unclear whether Trump, who has vowed not to lift the blockade until a deal with Iran is reached, “100% complete,” entertained a reported offer to end the two-month-old war. Oil prices rose on Tuesday due to uncertainty over the outcome of the war.
Bond investors are also looking forward to the Fed’s two-day monetary policy meeting ending on Wednesday, when outgoing Fed Chairman Jerome Powell and the Federal Open Market Committee are widely expected to keep interest rates on hold at 3.75% from the current 3.50%.
The European Central Bank (ECB) and the Bank of England (BoE) are also scheduled to hold important meetings as the Iran war weighs on the outlook for inflation and economic growth.
Both central banks will publish their latest monetary policy decisions on Thursday, with economists expecting both to leave their benchmark interest rates unchanged at their policy meetings this month, while leaving the door open for a hike later this year.
— CNBC’s Holly Elliott also contributed to this report.
