Treasury yields edged lower again on Tuesday as traders monitor the latest developments in the Middle East and the potential impact on borrowing costs.
yield on 10-year US treasury The note – the benchmark for government borrowing – fell more than 1 basis point to 4.2755%.
2-year treasury note The yield, which is more sensitive to short-term Federal Reserve interest rate decisions, was down more than 1 basis point, at 3.763%, as of 5:10 a.m. ET. 30-year treasury bond The yield also declined by more than 1 basis point to 4.8867%.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
The decline came after Treasury yields edged lower on Monday amid renewed optimism over a possible permanent resolution to the conflict following last week’s uneasy ceasefire agreement.
Energy prices fell on Tuesday West Texas Intermediate It fell 2.6% to $96.54 a barrel as investors assessed the impact of the US blockade of the Strait of Hormuz, aimed at forcing Iran to reopen the vital shipping lane.
Meanwhile, new wholesale inflation data published later is expected to show producer prices rose 1.3% during March.
The US Bureau of Labor Statistics’ monthly producer price index, which tracks the average change in prices received by domestic producers in sectors such as transportation, warehousing and construction, rose 0.7% during February, above the consensus estimate of 0.3%.
The latest data points come as investors continue to assess the lasting impact of the US-Iran conflict on inflation and the direction of interest rate policy at the Fed.
