Treasury yields slide as oil prices fall
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U.S. Treasury yields slid on Friday as oil prices dropped following a report that Pakistan is exploring a way to restart peace talks between the U.S. and Iran.
The yield on the 10-year U.S. Treasury note — the key benchmark for mortgage and auto loans and credit card debt — was last down more than 4 basis points at 4.657%. On Thursday, it had risen above 4.7%, the highest since Jan. 15, 2025, before the start of President Donald Trump’s second term.
The 2-year Treasury note yield, which more closely tracks short-term Federal Reserve interest rate policy, also pulled back more than 4 basis points, to 4.311%. The longer-dated 30-year Treasury bond yield was down more than 3 basis points, to 5.14%.
One basis point equals 0.01%, and yields and prices move inversely to one another.
On Friday, Reuters reported that Pakistan, with China’s support, is exploring a path to resume talks between the U.S. and Iran on ending the conflict in the Middle East. The report said that Pakistan’s foreign minister discussed the new push with Chinese officials last week.
International benchmark Brent crude futures declined 4% to around $96 per barrel, while U.S. West Texas Intermediate futures shed 4% to trade at around $88.
This comes after President Donald Trump said he will soon make a decision on whether to launch a “massive attack” on Iran after the conflict in the Middle East expanded to a new battleground in the Red Sea earlier this week as Houthi rebels in Yemen threatened oil tankers.
“I am considering a massive attack. Bigger than ever before. I am close to making a decision. We are all set for it,” Trump said to Axios on Thursday.
U.S. forces have already hammered Iranian targets in recent days. In fact, Central Command completed its 13th night of strikes in a row overnight.
Yields were lower earlier in the day after the S&P Global Flash U.S. purchasing managers index — which measures the economic health of American manufacturing and the service sector — moved down slightly in July to 53.8, below the 54.4 that economists polled by Dow Jones had estimated.
— CNBC’s Chloe Taylor contributed to this report.
