Treasury yields dip as oil jumps on Iran Strait
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- Treasury yields edged lower Tuesday, with the 10‑year at 4.202%, the 30‑year at 4.848%, and the 2‑year at 3.674%.
- Brent crude rose 3.2% to $103.42 per barrel, while U.S. West Texas Intermediate climbed 2.9% to $96.21 per barrel amid fears of disrupted shipping through the Strait of Hormuz.
- Iranian attacks on tankers and UAE energy infrastructure have plunged ship movements through the Strait of Hormuz, prompting the U.S. to urge allies to send naval forces to protect tanker traffic.
- Federal Reserve policymakers are set to meet on Wednesday, with Wall Street nearly unanimous that the Fed will keep its benchmark rate between 3.50% and 3.75%.
- Bret Kenwell of eToro warned the Fed is in a bind because slower growth and a softer labor market would normally call for easing, but sticky inflation and surging oil prices add uncertainty.
- President Donald Trump said the U.S. has asked to delay his planned meeting with Chinese President Xi Jinping by about a month due to the war with Iran, and he was uncertain if the trip would proceed.
Why it matters: Higher oil prices and the threat to Strait of Hormuz shipping tighten inflationary pressures, constraining the Fed’s ability to cut rates even as investors push Treasury yields lower for a short‑term hedge, while the delayed Trump‑Xi meeting underscores the geopolitical ripple effect on market sentiment.
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