Treasury yields hold steady as investors monitor Israel-Iran ceasefire

U.S. Treasury yields remained relatively stable on Wednesday as investors monitored geopolitical tensions following a ceasefire between Israel and Iran. The 10-year Treasury yield dipped slightly to 4.28%, the 2-year inched up to 3.78%, and the 30-year yield held at around 4.818%. Investors are navigating global uncertainty while awaiting cues from Federal Reserve Chairman Jerome Powell’s ongoing congressional testimony.

The ceasefire between Israel and Iran, brokered on Tuesday by U.S. President Donald Trump, initially saw violations by both countries through the firing of non-lethal rockets. However, the truce has held since then, bringing a temporary calm to markets. Despite this, investors remain cautious, aware that any escalation could increase volatility and impact bond markets and broader investor sentiment.

On the monetary policy front, Jerome Powell addressed the House Financial Services Committee on Tuesday, signaling the Federal Reserve’s intent to keep interest rates unchanged for now. He emphasized the uncertainty surrounding the economic impact of newly introduced tariffs, suggesting a cautious approach until clearer data emerges.

Powell’s comments have drawn criticism from President Trump, who continues to press for more aggressive rate cuts. On Truth Social, Trump called Powell “dumb” and “hardheaded,” urging Congress to challenge his stance. Powell is set to testify again before the Senate Banking Committee on Wednesday, which could offer further insights into future Fed policy.

Meanwhile, investors are also closely watching upcoming economic data, including May’s new home sales report, the second-quarter GDP growth figures due Thursday, and Friday’s release of the personal consumption expenditures (PCE) index — the Fed’s preferred inflation measure. These reports could influence both market expectations and the Fed’s next moves.

Source: CNBC