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US Treasury yields fell on Friday as oil prices fell following reports that Pakistan is exploring ways to restart peace talks between the US and Iran.
yield of 10 year US bond Interest rates, a key benchmark for mortgages, auto loans and credit card debt, last fell more than 2 basis points to 4.681%. It was above 4.7% on Thursday, the highest level since January 15, 2025, before the start of President Donald Trump’s second term.
of 2 year Treasury bill The yield, which is more closely tied to the Federal Reserve’s short-term interest rate policy, also fell by more than 2 basis points to 4.333%. longer date 30 year treasury Bond yields fell less than 1 basis point to 5.164%.
One basis point equals 0.01%, and yield and price are inversely proportional to each other.
On Friday, Reuters reported that Pakistan, with support from China, is exploring a path to resuming talks between the United States and Iran to end the Middle East conflict. Pakistan’s foreign minister reportedly held talks with Chinese officials about the new push last week.
international benchmark brent crude oil futures It fell almost 4% to close at $96.78 per barrel. West Texas Intermediate Futures It fell 3% to close at $89.31.
“Today’s decline in oil prices has relieved some of the recent upward pressure on inflation and interest rate expectations,” said Joao Bianco, senior investment strategist at Bondblocks. “Long-term U.S. Treasuries remain particularly sensitive to developments in the Middle East, given their impact on energy markets and long-term inflation expectations.”
Oil prices rose from the day’s lows after the New York Times reported on Friday that President Donald Trump was meeting with top advisers and Cabinet members to decide whether the United States would step up its attacks on Iran.
The remarks came after President Trump told Axios on Thursday that he would soon decide whether to launch a “massive attack” on Iran, as the Middle East conflict expanded to a new battleground in the Red Sea as Yemen’s Houthi rebels threatened oil tankers earlier this week.
“We’re considering a major attack, bigger than we’ve ever had before. We’re getting closer to making a decision. We’re ready,” the president said.
US forces have already struck Iranian targets in recent days. In fact, Central Forces completed 13 consecutive attacks in one night.
Yields fell earlier in the day after the S&P Global Flash U.S. Purchasing Managers Index, which measures the performance of the U.S. manufacturing and services sector, fell slightly in July to 53.8, below the 54.4 expected by economists compiled by Dow Jones.
—CNBC’s Chloe Taylor contributed to this report.
