US President Donald Trump joins forces with Kevin Warsh (left) as they arrive at Warsh’s swearing-in ceremony as the new Federal Reserve Chairman held in the East Room of the White House in Washington, DC on May 22, 2026.
Anna Moneymaker | Getty Images
U.S. Treasury yields fell on Tuesday as investors looked ahead to the Federal Reserve’s two-day policy meeting and expectations for inflation and interest rate hikes continued to ease.
The yield on the 10-year Treasury note, a key measure of U.S. government borrowing, fell more than 2 basis points to 4.449%.
The yield on the two-year Treasury note, which is more closely tied to the Federal Reserve’s short-term interest rate policy, fell more than a basis point to 4.047%. The yield on 30-year government bonds fell more than 1 basis point to 4.957%.
One basis point equals 0.01%, and yields and prices move in opposite directions.
US Treasury yields fell after an interim peace deal between the US and Iran was announced on Sunday, extending the US-Iran ceasefire for 60 days and opening the way for all shipping through the Strait of Hormuz.
Arriving at the G7 meeting, President Donald Trump said a peace framework with Iran had been signed, adding that the Strait of Hormuz would be “fully reopened” on Friday, waiving Iranian tolls. President Trump said a formal signing ceremony would be held in Geneva on Friday.
Elsewhere, investors are focused on the two-day Federal Reserve meeting that begins Tuesday, chaired for the first time by new Chairman Kevin Warsh. The central bank plans to keep its benchmark lending rate between 3.50% and 3.75%, according to Implied Prices used by CME’s FedWatch tool, but traders are backing down on expectations for a rate hike this year.
“A sustainable resolution to the Middle East crisis would ease the policy dilemma for major central banks, which are under pressure to raise interest rates to avoid the inflationary effects of rising energy prices,” said Mark Hefele, chief investment officer at UBS Global Wealth Management.
“A wide range of central banks will hold policy meetings this week, but the Fed will likely set the tone for markets.”
Economic data on housing and retail sales for May will also be released on Wednesday.
—CNBC’s Hugh Leask also contributed to this report.
