The yield on the US 10-year Treasury note declined to 4.67% on Monday, pressured by lower oil prices and easing inflation concerns as optimism grew that tensions in the Middle East may abate. US President Trump said negotiations with Iran would begin on Monday afternoon and confirmed he had canceled a planned military strike on the country.
Investors are also looking ahead to a new slate of US economic releases this week, including the closely watched employment report, for additional insight into the strength of the labor market. Last week, the Federal Reserve left interest rates unchanged, though three policymakers dissented. Market pricing now reflects roughly a 63% chance of a 25-basis-point rate increase in September, down from about 80% before the decision, after Chair Kevin Warsh offered limited forward guidance on the future path of interest rates.
Separately, reports suggested that Warsh is considering reducing the number of Federal Reserve policy meetings from the current eight per year.
