Treasury yields slide as traders pare bets on Fed rate cuts
U.S. Treasury yields were lower on Friday as investors looked ahead to job data for the week and monitored the U.S.-Iran war, which entered its fifth week.
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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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Treasury yields slid broadly on Monday as new comments from the top Federal Reserve official quelled fears of tighter monetary policy.
The benchmark 10-year Treasury yield was down 10 basis points at 4.334%, while the 30-year Treasury bond yield shed more than 8 basis points to 4.899%. The 2-year Treasury yield was also lower by more than 9 basis points at 3.822%.
One basis point equals 0.01%, and yields move inversely to prices.
Fed Chair Jerome Powell said Monday that "inflation expectations do appear to be well anchored beyond the short term, but nonetheless, it's something we will eventually maybe face the question of what to do here."
The remarks pushed lowered Fed rate hike expectations for this year in the fed funds futures market, data from the CME Group's FedWatch tool showed.
Traders have been worried of late that the surge in oil prices, driven by the U.S.-Iran war, could force the Fed to raise its benchmark rate to fend off inflation.
In the latest developments on the war in the Middle East, President Donald Trump said Monday that the U.S. is "in serious discussions with A NEW, AND MORE REASONABLE, REGIME to end our Military Operations in Iran." That said, if the Strait of Hormuz is not "immediately" reopened and a peace deal is not reached "shortly," the president threatened to "completely" obliterate the Middle Eastern country's energy infrastructure, including its oil wells as well as Kharg Island.
Trump had told the Financial Times on Sunday that he could "take the oil in Iran," and seize the country's export hub of Kharg Island. "Maybe we take Kharg Island, maybe we don't. We have a lot of options," he said.
Investors also are awaiting several employment reports during the holiday-shortened trading week. The market will be closed on Friday in observance of Good Friday.
The closely-watched Job Openings and Labor Turnover Survey (JOLTS) will be released at 10 a.m. ET on Tuesday, while the ADP Employment Survey is also due on Wednesday. The key nonfarm payrolls Report is slated for release on Friday morning.
"Looking at the week ahead, we should start to learn about the economic consequences of the conflict, as several data releases for March are out, which cover the period since the strikes began on February 28," Deutsche Bank analysts said in a note.
The ISM Manufacturing report on Wednesday will also show early indicators of inflationary pressures linked to the conflict and its impact on component costs, according to the Deutsche Bank analysts.
"Otherwise in the US, the focus will be on whether higher oil prices have started to impact business sentiment and inflation in a meaningful way," they added.
