Treasury yields rise as U.S.-Iran peace talks hit an impasse
Treasury yields rose as U.S.-Iran peace talks stalled over Iran's proposal to reopen the Strait of Hormuz in exchange for lifting the U.S. blockade, a deal whose acceptance by President Trump remains unclear. Oil prices climbed amid ongoing uncertainty from the two-month-long conflict, weighing on global markets. Investors are now turning attention to upcoming monetary policy decisions from the Fed, ECB, and Bank of England, all expected to hold rates steady amid shifting inflation and growth outlooks. The central banks may keep future rate hikes on the table despite pausing for now.
- ▪Iran proposed reopening the Strait of Hormuz if the U.S. lifts its blockade and the war ends, delaying talks on its nuclear program.
- ▪President Trump has insisted the blockade won't be lifted until a deal is fully secured, and it's unclear if he accepted the proposal.
- ▪Oil prices rose overnight as the conflict continues to create market uncertainty.
- ▪The U.S. Federal Reserve, European Central Bank, and Bank of England are all expected to hold interest rates steady in their upcoming meetings.
- ▪While rates are likely to remain unchanged, central banks may signal potential rate hikes later this year due to inflation concerns.
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President Donald Trump and his national security team discussed Iran's proposal to reopen the Strait of Hormuz if the U.S. lifts its blockade and the war ends, White House press secretary Karoline Leavitt confirmed on Monday.The proposal would postpone negotiations on Tehran's nuclear ambitions for a later date, Axios and The Associated Press reported earlier in the session.It's unclear whether Trump, who has vowed not to lift the blockade until a deal with Iran is "100% complete," entertained the reported offer to end the two-month-old war. Oil prices edged higher overnight as uncertainty lingered over the outcome of the war.Meanwhile, investors will also be looking ahead to the Fed's monetary policy meeting on Wednesday, during which outgoing Fed chair Jerome Powell is widely expected to keep interest rates on hold. The European Central Bank (ECB) and Bank of England (BOE) are also due to hold pivotal meetings as the war upends inflation and growth expectations.The two central banks will both publish their latest monetary policy decisions on Thursday, with economists expecting the central banks to stand pat on their benchmark interest rates at their respective meetings this month, but will leave the door open to hikes later this year. — CNBC's Holly Ellyatt also contributed to this report.
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