Overview
- U.S. government borrowing costs fell after a report said Washington and Tehran were close to a one‑page agreement to end the war and President Trump paused the Strait of Hormuz escort mission known as Project Freedom.
- Benchmark yields dropped sharply, with the 10‑year near 4.01%, the 2‑year around 3.88%, and the 30‑year near 4.93%, as oil slid below $100 a barrel.
- In the prior sessions, rising war risk had pushed rates higher, with the 10‑year near 4.41%, the 2‑year around 3.93%, and the 30‑year topping 5%, a level that often strains stocks and long‑term borrowing.
- Tension escalated after Trump outlined plans to guide commercial ships through Hormuz and Iran warned it would respond, while conflicting reports about fire on a U.S. warship added to market swings.
- Bond markets have largely priced out Fed rate cuts for 2026 and are entertaining tighter policy in 2027, and traders now look to the Treasury’s refunding plans, remarks from Fed officials, and U.S. jobs data for the next cue.