FX.co ★ US 10-Year Treasury Yield Edges Down

On Monday, the yield on the US 10-year Treasury note slightly declined to 4.35%, reversing an earlier increase. This adjustment comes as investors evaluate the intensified conflict in the Middle East. Over the weekend, the United States became actively involved in Israel's war by executing strikes on Iranian nuclear sites, creating uncertainty in the markets about how Iran might retaliate. A significant concern is the potential for Iran to disrupt shipping through the Strait of Hormuz, a crucial passage for the world's oil supply, which could trigger a sharp rise in oil prices and subsequently influence the Federal Reserve’s rate cut schedule. Market participants are also paying close attention to Fed Chair Jerome Powell’s semi-annual monetary policy testimony before Congress this week for insights into the central bank’s position. Furthermore, the release of the upcoming PCE inflation report and speeches from several other Fed officials are pivotal events that could have significant market repercussions.