Treasury yields fell slightly on Tuesday as investors weighed escalating tensions in the Middle East and rising oil prices ahead of the Federal Reserve’s policy decision.
The scale 10-year Treasury Department The yield was almost 2 basis points lower at 4.202%, while the 30-year Treasury Department The bond yield fell a fraction to 4.854%. The 2 years treasury The bond yield also fell almost 2 basis points to 3.665%.
One basis point is equal to 0.01%, and yields and prices are inversely related.
Oil prices jumped on Tuesday as questions remained over whether a U.S.-led coalition would protect shipping through the Strait of Hormuz. Ship movements on the vital shipping route have fallen after Iranian attacks on tankers, causing one of the biggest disruptions to global oil supplies in history.
International benchmark Brent crude gained 2% to about $102 a barrel, while U.S. crude rose 2% to about $102 a barrel West Texas Middle School Oil prices also rose about 1% to about $95 a barrel.
The US has called on its allies to send naval forces to protect tanker traffic through the strait. Another tanker was recently struck near the main waterway as a new wave of attacks hit the UAE’s energy infrastructure this week.
This comes after the world’s largest ultra-sour gas project was hit by a drone, a fire broke out in the United Arab Emirates’ Fujairah oil industrial zone and another tanker was struck near the strategic Strait of Hormuz.
Investors are also turning their attention to the Federal Reserve’s second policy meeting of the year, which is scheduled to end on Wednesday. Wall Street is almost unanimous that the central bank will keep its key interest rate at 3.50% to 3.75%.
“The Fed is in a bind,” said Bret Kenwell, U.S. investment analyst at eToro. “Slower growth and a weaker labor market would normally support monetary easing. But inflation remains stubborn, while rising oil prices make the outlook even more uncertain.”
Regardless, President Donald Trump said Monday that the U.S. had asked to postpone its plan Meeting with the Chinese President Xi Jinping In Beijing by “approximately a month” due to ongoing delays War with Iran.
Trump was expected to travel to China to meet with Xi in late March.
But when asked in the Oval Office on Monday afternoon whether the trip was still underway, Trump said: “I don’t know, we’re working on that right now.”
