US Treasury yields declined on Wednesday as investors maintained confidence in the potential for a peace deal in the Iran conflict, even as tensions between Washington and Tehran remain high.
The 10-year Treasury yield dropped more than 2 basis points to 4.465%, reflecting a shift in risk appetite and reduced expectations for aggressive rate hikes.
This move follows a broader trend of easing concerns in global bond markets, with UK government bond yields also falling to five-week lows earlier in the week.
The shift appears to be driven by a combination of reduced political uncertainty and continued hopes for a diplomatic resolution to the Iran standoff.
The yield curve, which had been under pressure from inflation concerns, showed signs of stabilization.
Analysts suggest that the market is recalibrating its expectations for central bank policy, with the Federal Reserve's rate path now seen as less aggressive than previously feared.