U.S. Treasury yields fall as oil prices plunge on Iran de-escalation hopes

U.S. Treasury yields fell as oil prices slumped on Monday following President Donald Trump's claims that negotiations with Iran will begin again, after the U.S. held off on fresh strikes against the Islamic Republic at the request of Gulf allies. The yield on the 10-year U.S. Treasury note fell over 1 basis point to 4.688%. The 2-year Treasury note yield fell 4 basis points to 4.252%. The longer-dated 30-year Treasury bond yield fell over 4 basis points to 5.226%. However, Iranian foreign ministry spokesperson Esmail Baghaei told a press conference on Monday that there is no immediate plan for negotiations with the U.S., reiterating that Tehran is currently only engaged in talks with Oman regarding the Strait of Hormuz. Last week, the 30-year Treasury yield rose to its highest level since 2007 as investors reacted to an apparently "hawkish hold" from Federal Reserve interest rate setters. Some Fed officials said Friday that they favor raising rates to help ease inflation. Those officials voted against the central bank's decision in a 9-3 vote on Wednesday to hold its key interest rate steady in a range of 3.5% to 3.75%. "While the decline in short-dated yields reflects a more dovish near-term policy outlook, the rise in long-end yields signals growing concern that Chair Warsh may prove unwilling to act aggressively enough should inflation remain elevated," said Seema Shah, chief global strategist at Principal Asset Management. "The bond market is effectively testing the Fed's credibility." Monday's data highlight is manufacturing PMI data for July, released at 3:00 p.m. ET.