Treasury Yields Slide as Oil Prices Fall Amid Hopes for New Peace Talks
US Treasury yields dropped on Friday as oil prices declined following reports that Pakistan is exploring ways to restart peace talks between the US and Iran.
The yield on the 10-year US Treasury note, a key benchmark for mortgage and auto loans, was last down more than 2 basis points at 4.679%. The 2-year Treasury note yield also pulled back more than 3 basis points, to 4.326%.
International benchmark Brent crude futures declined by 4% to around $96 per barrel, while US West Texas Intermediate futures shed 3% to trade at around $89.
The decline in oil prices has tempered some of the recent upward pressure on inflation and rate expectations, said JoAnne Bianco, senior investment strategist at BondBloxx. Long-dated US Treasuries remain sensitive to developments in the Middle East due to their impact on energy markets and longer-term inflation expectations.