06.04.202614:40:03UTC+00Treasury Yields Edge Higher on Monday

The yield on the US 10-year Treasury note hovered around 4.33% on Monday, its highest level in about a week, as traders returned from an extended holiday and continued to assess the ongoing war with Iran, now in its sixth week, amid oil prices near their 2022 highs. President Trump threatened to begin targeting Iran’s power plants on Tuesday, while Iran has continued to strike energy infrastructure in neighboring Gulf countries.

Some relief came from reports that Iran, the US, and a group of regional mediators are discussing a potential 45-day ceasefire that could lay the groundwork for ending the conflict, as well as from indications that more ships are now passing through the Strait of Hormuz.

On the data front, the ISM Services PMI prices index surged to its highest level since 2022, reflecting the impact of the war with Iran. Markets have fully priced in that the Federal Reserve will keep the federal funds rate unchanged later this month and expect borrowing costs to remain steady for the rest of the year.