Federal Reserve Chairman Kevin Warsh departs from the East Room of the White House after a swearing-in ceremony, May 22, 2026.
Aaron Schwartz | AFP | Getty Images
U.S. Treasury yields fell on Monday as the announcement of a preliminary peace agreement between Washington and Tehran shifted investor expectations for inflation and the outlook for interest rates.
The yield on the 10-year U.S. Treasury note — the key benchmark for U.S. government borrowing — fell more than 1 basis point to 4.469%.
The 2-year Treasury note yield, which more closely tracks short-term Federal Reserve interest rate policy, was more than 2 basis points lower at 4.06%. The longer-dated 30-year Treasury bond yield lost less than 1 basis point to 4.969%.
One basis point equals 0.01%, and yields and prices move in opposite directions.
President Donald Trump said late Sunday on social media that a deal with Iran was “now complete.” Pakistan Prime Minister Shehbaz Sharif said an official signing ceremony would take place on Friday in Switzerland.
Trump also said he authorized the reopening of the key Strait of Hormuz maritime passage, sending oil prices tumbling late Sunday. U.S. crude fell 5% in response.
The latest memorandum of understanding between the U.S. and the Islamic Republic came after an exchange of fire between Israel and the Tehran-backed Hezbollah militia in Lebanon, adding further pressure on the fragile ceasefire in the Persian Gulf.
Domestically, investors are watching for the two-day Federal Reserve policy meeting that gets underway Tuesday, the first to be led by new chairman Kevin Warsh. No change is expected in the central bank’s benchmark lending rate of 3.50% to 3.75%, and expectations have eased that the central bank will be forced to raise rates by the end of the year, based on implied prices used in the CME’s FedWatch tool.
Economic data on housing and retail sales in May are also due to be reported on Wednesday.
“Given the recent uptick in inflation, we think Wednesday’s Federal Reserve meeting itself in terms of any monetary policy changes will be a snoozer,” said Michael Landsberg, chief investment officer at Landsberg Bennett private wealth management. “We will be paying particular attention to Warsh’s first press conference as we try to understand what type of communicator he will be and what level of detail he will go into during the press conference.”
— CNBC’s Alex Harring also contributed to this report.
