The 10-Year Treasury Yield Fell To 4.46% On A U.S.-Iran Peace Deal

One Sunday-night post moved the whole bond market.

Trump said a peace deal with Iran was "now complete." By Monday, it was cheaper for the U.S. to borrow.

Why The Deal Pushed Yields Down

A Treasury yield is the rate the government pays to borrow money. Yields tend to fall when investors expect calm prices ahead.

A peace deal makes the world look safer. And when things look safer, lenders ask for less. Think of a bank that cuts your rate once your credit looks good. Same idea, just much bigger.

The 10-year yield fell almost 3 basis points to 4.457%. One basis point is just 0.01%, so the drop is small.

The signal behind it is not. The 2-year yield fell even more, to 4.041%.

That one tracks the Fed more closely than the rest. The 30-year yield slipped too, to 4.961%.

There was a second piece behind the move. Trump reopened the Strait of Hormuz.

That is the narrow sea lane where much of the world's oil flows. A blocked strait scares traders, and a reopened one calms them fast.

The news sent U.S. crude down 5% on Sunday night.

Cheaper oil tends to mean cheaper gas. And cheaper gas helps cool prices across the board.

The 10-year yield is a key benchmark for the whole country. It helps set rates on mortgages and car loans.

So when it falls, borrowing can get cheaper far beyond Washington. That is why one yield gets so much attention.

The deal did not come out of nowhere. It followed fresh fighting between Israel and the Tehran-backed group Hezbollah in Lebanon.

That clash had strained a shaky truce in the Gulf. Pakistan's leader said the two sides will sign the deal Friday in Switzerland.

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The Fed Meets Tuesday, With A New Chair

The timing matters here. The Fed starts a two-day meeting Tuesday.

It is the first one led by new chair Kevin Warsh. Almost no one expects a rate change.

The Fed's key rate sits at 3.50% to 3.75%. A few traders had feared a rate hike by year-end.

That fear has now eased. Lower rates can mean cheaper loans and mortgages over time.

Traders track these odds on a tool called the CME FedWatch. It reads bets on where rates go next.

Right now it shows little chance of a hike. Michael Landsberg helps run Landsberg Bennett Private Wealth Management.

He said the meeting itself will likely be "a snoozer." The bigger draw is what Warsh says after.

What To Watch

Warsh's first press conference may matter more than the rate call. Investors want to hear how he talks about the economy.

They also want to see how much he gives away. Fresh data on housing and retail sales lands Wednesday too.

The bond market just took Trump at his word.

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