U.S. Treasury yields edged slightly higher in early Friday trading as investors continue to navigate growing uncertainty over how the Middle East conflict is impacting the economy. <\/p>\n
The 10-year Treasury\u00a0yield \u2014 the benchmark for U.S. government borrowing \u2014 remained largely unchanged as of 5:15 a.m. ET Friday, reaching 4.286%. <\/p>\n
But yields on\u00a0the 2-year Treasury note, which is more sensitive to short-term Federal Reserve rates decisions, rose by 1 basis point early Friday, at 3.849%. The\u00a030-year bond\u00a0yield, meanwhile, rose about 1 basis point to 4.866%.<\/p>\n
One basis point equals 0.01%, or 1\/100th of 1%, and yields and prices move inversely to one another.<\/p>\n
As the war in Iran weighs heavily over markets, investors are now positioning for a slightly more hawkish stance from the Federal Reserve as higher global oil prices and renewed labor market uncertainty shape the economic backdrop.<\/p>\n
Inflation was already trending above the Fed’s target even before energy costs spiked at the outbreak of the conflict on Feb. 28. The Fed’s rate-setting Federal Open Market Committee voted 11-1 on Wednesday to leave its key interest rate unchanged, a move widely anticipated by investors. <\/p>\n
Central banks in Europe also held rates steady<\/a> on Thursday as policymakers grapple with the impact of the war, with markets now pricing in rate hikes this year. <\/p>\n Oil traded lower on Friday, with U.S. West Texas Intermediate<\/a> prices sliding 1.2% to $94.99 a barrel, and Brent crude<\/a>, the global benchmark, down 1.3% to $107.28. <\/p>\n The dip comes after Treasury Secretary Scott Bessent indicated that sanctions on Iranian crude stored aboard tankers could be lifted<\/a> to help ease price pressures. Israeli Prime Minister Benjamin Netanyahu said his country was assisting the U.S. “in intel and other means” to try and reopen the Strait of Hormuz. <\/p>\n