FX.co ★ Treasury Yields Fall From Session Highs

On Monday, the yield on the 10-year U.S. Treasury note decreased to 4.41%, retreating from an intraday peak of 4.46%. This shift occurred as concerns lessened regarding the possibility of Israel's conflict with Iran escalating into a wider regional war. Additionally, sentiment improved following reports that Iran is expressing an openness to recommence nuclear negotiations, which played a role in the reduction of oil prices. The decrease in energy costs helped ease inflationary pressures, thereby reducing the strain on the bond market. Concurrently, the Federal Reserve is anticipated to keep the federal funds rate unchanged on Wednesday. Policymakers have previously indicated that the uncertainty surrounding the U.S. economic outlook—due in part to indeterminate future trade and fiscal policies—will inhibit decisive policy shifts. Rate futures suggest that the market expects two rate cuts over the year. The Summary of Economic Projections, to be released alongside the Fed's rate decision, will provide insights into how policymakers' perspectives align or contrast with those of Wall Street.