Treasury yields tumble as Trump talks up Iran ceasefire plan
U.S. Treasury yields fell sharply on Wednesday as investors watched for a possible end to the conflict in the Middle East.
The 10-year Treasury yield — the benchmark for U.S. government borrowing — was 7 basis points lower at 4.322%.
The yield on the 2-year Treasury note, which are more sensitive to short-term Federal Reserve rate decisions, was more than 5 basis points lower at 3.883%. The 30-year bond yield, meanwhile, dipped by more than 4 basis points, falling to 4.891%.
One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely to one another.
On Wednesday, the Associated Press reported that Iran has received the U.S.’ 15-point peace plan. This comes after The New York Times reported Tuesday that the U.S. had sent a plan via Pakistan to officials in Tehran. The Islamic Republic denied it was in talks over any potential ceasefire agreement.
Yields remained lower after Iranian state media reported Wednesday that Iran would reject a U.S. ceasefire offer and has proposed a five-point counteroffer, which includes Tehran having sovereignty over the Strait of Hormuz.
President Donald Trump had said Tuesday that Washington was “in negotiations right now” with Iran over a plan to end the conflict.
Wednesday’s bond rally also came as energy prices tumbled following reports that Iran would allow “non-hostile” ships through the vital Strait of Hormuz shipping channel. Brent crude, the global benchmark, settled at $102.22 a barrel after sliding 2.17% on Wednesday. U.S. West Texas Intermediate settled 2.2% lower at $90.32.
The sharp swings in market sentiment underpin sustained investor caution over the prospect of rising inflation and a halt to Fed rate cuts.
The bond market also saw its second disappointing Treasury auction this week. Wednesday’s $70 billion 5-year auction followed a poor $69 billion 2-year auction on Tuesday, which recorded the weakest demand since March 2025. The 2-year yield was more than 9 basis points higher at one point that day, while 10-year yields had also ticked higher.
