Traders work on the floor of the New York Stock Exchange during morning trading on March 25, 2026 in New York City.
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U.S. Treasury yields fell sharply on Monday as new comments from a senior Federal Reserve official eased fears of monetary tightening.
The yield on the benchmark 10-year government bond fell more than 9 basis points to 4.348%, and the yield on the 30-year government bond fell more than 7 basis points to 4.906%. The two-year Treasury yield also fell by more than 8 basis points to 3.834%.
One basis point equals 0.01%, and the yield is inversely proportional to the price.
“Inflation expectations do appear to be well-entrenched beyond the near term, but we may still end up facing the question of what to do here,” Fed Chairman Jerome Powell said on Monday.
The comments lowered expectations in the federal funds futures market for a Fed rate hike this year, according to data from CME Group’s FedWatch tool.
Traders have recently worried that soaring oil prices due to the U.S.-Iran war could force the Fed to raise benchmark interest rates to stave off inflation.
Commenting on the latest developments in the Middle East wars, President Donald Trump said Monday that the United States is “in serious discussions with a new, more rational regime to end military operations in Iran.” However, the president threatened to “completely” obliterate the Middle East country’s energy infrastructure, including oil wells and Kharg Island, if the Strait of Hormuz is not reopened “immediately” and a peace deal is not reached “soon.”
President Trump told the Financial Times on Sunday that he could “take hold of Iranian oil” and seize the country’s export hub, Kharg Island. “We may or may not take Kharg Island. We have many options,” he said.
Investors are also awaiting multiple jobs numbers during the holiday-shortened business week. The market will be closed on Friday for Good Friday.
The closely watched Job Openings and Turnover Survey (JOLTS) will be released at 10 a.m. ET on Tuesday, and the ADP Employment Survey will also be released on Wednesday. The key non-farm payrolls report is expected to be released Friday morning.
“As we look to the week ahead, we should begin to learn about the economic impact of the conflict, as multiple March statistics covering the period since the strike began on February 28 have been released,” Deutsche Bank analysts said in a note.
Wednesday’s ISM manufacturing report will also provide early indicators of conflict-related inflationary pressures and their impact on component costs, Deutsche Bank analysts said.
“Otherwise, the focus will be on whether rising oil prices are starting to have a meaningful impact on business confidence and inflation in the U.S.,” he added.
