WASHINGTON (dpa-AFX) - After ending the previous session little changed, treasuries showed a strong move to the upside during trading on Wednesday.
Bond prices gave back ground after an early surge but remained firmly positive. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 5.2 basis points to 4.291 percent after hitting a low of 4.234 percent.
The early rally by treasuries came in reaction to news that the U.S., Israel and Iran have agreed to a two-week ceasefire.
In a Truth Social post Tuesday evening, President Donald Trump said he has agreed to suspend the bombing and attack of Iran for a period of two weeks subject to Tehran agreeing to the complete, immediate and safe opening of the Strait of Hormuz.
Trump said the U.S. has received a 10-point proposal from Iran that he believes is a 'workable basis on which to negotiate' and said the two-week ceasefire will allow the agreement to be finalized and consummated.
A subsequent statement from Iran's Foreign Minister Abbas Araghchi indicated the Strait of Hormuz will be reopened for a period of two weeks if the attacks against Iran are halted.
The news has contributed to a nosedive by the price of crude oil, with U.S. crude oil futures plunging by more than 15 percent and dropping well below $100 a barrel.
While the conflict in the Middle East has led to a heightened degree of economic uncertainty, the minutes of the Federal Reserve's latest monetary policy meeting revealed many officials still expect to resume cutting interest rates this year.
The minutes of the Fed's March 17-18 meeting said participants emphasized the importance of being 'nimble' in adjusting the stance of monetary policy
'Many participants judged that, in time, it would likely become appropriate to lower the target range for the federal funds rate if inflation were to decline in line with their expectations,' the Fed said.
However, the Fed noted a couple of these participants had pushed their assessment of the most likely timing of rate cuts further into the future in light of recent readings on inflation.
The comments in the minutes come as officials' latest economic projections provided after the meeting showed they still expect to cut interest rates by a quarter point this year.
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