Trump extends Iran deadline, US Treasury yields hit highest level since July

Investing.com - On Friday, benchmark U.S. Treasury yields surged to their highest level since July, as investors continued to assess a new round of oil price increases, despite President Donald Trump’s extension of the deadline for U.S. attacks on Iran’s energy infrastructure.

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As of 7:04 AM Eastern Time (7:04 PM Beijing Time), the yield on the U.S. 10-year Treasury note had climbed to 4.46%, up about 4 basis points. On Thursday, the 10-year Treasury yield rose by 9 basis points. Yields typically move inversely to bond prices.

U.S. government bonds have been significantly impacted by the actual closure of the Strait of Hormuz, a crucial waterway located off the southern coast of Iran that carries about one-fifth of the world’s oil supply. Oil prices remain well above levels seen before the conflict began in late January, raising concerns about rising inflationary pressures worldwide.

As a result, the market has almost completely eliminated expectations for a rate cut by the Federal Reserve this year and is even beginning to consider the possibility of rate hikes in the coming months. Federal Reserve policymakers held rates steady at last week’s meeting but noted the threat that energy shocks could accelerate inflation.

The OECD warned on Thursday about the impact of rising prices on global economic growth, particularly emphasizing the potential for U.S. inflation to accelerate.

Oil Prices Continue to Rise

Brent crude futures—the global benchmark—continued to rise, recovering most of the losses incurred earlier in the week, as hopes for progress in the nearly month-long conflict in the Middle East had sparked optimism in the market.

President Trump announced Thursday evening that the White House had requested Iran to reopen the Strait of Hormuz or face an extension of the deadline for U.S. attacks on its energy facilities until April 6.

In a post on Truth Social, Trump claimed that the extension was made at the request of the Iranian government and added that Tehran was engaged in “ongoing” negotiations with the U.S., with progress being “very smooth.” He insisted that contrary reports from the media were “incorrect.”

Trump had previously issued an ultimatum to Iran over the weekend, vowing to strike the country’s power plants if Iran did not lift its blockade of the Strait of Hormuz. The Strait of Hormuz is a vital waterway through which about one-fifth of the world’s oil flows. Trump later indicated that he would postpone action until Friday after what he described as “very strong” discussions with Iran.

Tehran has publicly denied any such negotiations with Washington.

G7 diplomats are scheduled to meet in France on Friday, and the White House’s call for international assistance to help lift the blockade of the Strait of Hormuz may dominate discussions. Thus far, these requests have been largely rejected.

The market will also be watching for the final data on the University of Michigan’s consumer confidence index for March, which may provide further insights into how American households expect to be affected by the conflict in the Middle East.

This article was translated with the assistance of artificial intelligence. For more information, please see our terms of use.