Treasury Markets Eye Warsh Confirmation Amid Middle East Tensions
Bond traders are focusing on Kevin Warsh's Senate confirmation hearing as the next key event for U.S. debt markets, following recent developments in the Iran conflict. Treasuries have rallied on hopes of de-escalation, with oil prices receding and expectations for Federal Reserve rate cuts adjusting accordingly.
Substrate placeholder — needs reviewU.S. Treasuries. -Iran peace talks that sparked a rally in Treasuries last week. U.S. two-year yield dipped below the Federal Reserve's current ceiling of 3.75% as crude oil prices fell, standing at around 3.72% on Monday.
Swaps indicated roughly 50% odds of a Fed interest-rate cut by year-end as of Friday. Other asset classes have not shown similar concerns.
U.S. Treasuries settled into a range after rising in the early weeks of the Iran war due to spiking oil prices. U.S. 10-year yields drifting just under 4.25%. Volatility in the bond market has eased back to near pre-war levels.
