Treasury Yields Retreat as Crude Falls Below $100 and Fiscal Pledges Emerge

Original summary · What happened

Yields on United States government bonds pulled back from their highest marks since 2002 as crude oil dropped below the $100 per barrel mark. Ten-year Treasury notes saw their yields slide by 3 basis points to 5.27%, while the 30-year bond yield decreased by 4 basis points to settle at 5.63%. Meanwhile, the policy-sensitive two-year note yield remained relatively unchanged during the session. The moderation followed evidence that increased shipping volume was making transit through the Strait of Hormuz, easing energy supply concerns.

The pause in the debt selloff coincided with remarks from Treasury Secretary Scott Bessent during a Pennsylvania fireside discussion. Bessent sought to reassure debt markets that a combination of economic expansion and budgetary discipline would alter federal borrowing trajectories quickly and curb expanding obligations. Fixed-income investors nonetheless approached the statements with caution, with broader sentiment still weighed down by elevated inflation risks stemming from the conflict involving Iran and expectations for firm Federal Reserve policy.