Scott Bessent reports potential deal to open the Strait of Hormuz, causing U.S. Treasury yields and oil prices to fall.
U.S. Treasury yields and oil prices declined on Tuesday as Scott Bessent, the Treasury Secretary, indicated a potential agreement to open the Strait of Hormuz could be reached by Tuesday or Wednesday. The 10-year U.S. Treasury note yield fell more than 4 basis points to 4.635%, while the 2-year Treasury note yield slipped more than 6 basis points to 4.194%. These movements occurred as West Texas Intermediate futures fell 3% to around $77 per barrel. Bessent noted that the U.S. is currently in talks with Iran to move toward a more normalized position in the conflict. While the 10-year yield is a key benchmark for government borrowing, analysts suggest that while energy-related inflation may ease, broader inflation may remain sticky in the near term. This follows a period of rising yields where the 30-year yield hit its highest level since 2007, driven by concerns over persistent inflation and a hawkish hold from Federal Reserve interest rate setters.