FX.co ★ US 10-Year Yield Drops to 7-Week Low

The yield on the US 10-year Treasury note stood at 4.35% on Tuesday, hovering close to a seven-week low as investors evaluated the durability of the truce between Iran and Israel and its potential effects on global energy prices. Recent threats of renewed strikes between these Middle Eastern nations have cast doubt on the de-escalation observed on Monday. During that time, controlled exchanges between Iranian and US forces and commitments to avoid retaliation had eased concerns over escalating hostilities. Meanwhile, oil and fuel tankers have continued to travel through the Persian Gulf without disruption, indicating that the conflict may not significantly impede global energy flows or reignite inflationary pressures. This situation has tempered US long-term yield movements despite reduced demand for safe-haven assets. On the monetary policy front, members of the Federal Open Market Committee (FOMC) have continued to discuss the possibility of a rate cut in July, citing evidence of disinflation and indications of a weakening labor market.