U.S. Treasury yields edged lower on Tuesday, as investors sought fresh clarity on the state of the domestic economy. Shortly after 5 a.m. ET, the benchmark 10-year Treasury yield declined by 2 basis points to 4.943%, while the 2-year yield dipped 1 basis point to 4.741%. The 30-year yield also retreated 2 basis points, settling at 5.272%. For context, one basis point equals 0.01%, and bond yields move inversely to prices.
The broader yield curve showed similar downward moves across various maturities. The 10-year note stood at 4.922%, down 0.041; the 1-month bill was at 3.871%, off 0.011; and the 1-year note fell 0.013 to 4.405%. Meanwhile, the 2-year yield dropped 0.03 to 4.723%, the 30-year bond slipped 0.038 to 5.258%, and shorter-term instruments also eased, with the 3-month bill at 4.11% (down 0.005) and the 6-month bill at 4.295% (down 0.013).
Market participants are now positioning for the ADP weekly employment report, due at 1:15 p.m. ET, which will offer a fresh snapshot of labor market conditions. Adding to the day's slate, Federal Reserve Vice Chair Phillip N. Jefferson is slated to speak at 10:20 a.m. ET at a Treasury market conference hosted by the New York Fed, and Wednesday will feature remarks from Fed Board Governor Michael S. Barr at a housing affordability summit in Chicago.
Before those appearances, Chicago Fed President Austan Goolsbee delivered remarks in London, underscoring his close watch on persistent service-sector inflation and whether AI data center construction could spill over and push overall output beyond the economy's capacity to absorb it. He noted that the Fed's response would be straightforward if demand were to overheat.
Goolsbee also highlighted a troubling pattern among economists, who have repeatedly pushed back their timeline for peak inflation. Initially, they expected inflation to crest in the fourth quarter of 2025, then shifted to the first quarter of 2026, followed by the second, third, and fourth quarters, and now they have moved the forecast to some point in 2027. He described this trajectory as far from encouraging.
Oil prices drew significant attention on Tuesday as well. After Treasury Secretary Scott Bessent announced the grounding of all Iranian civilian flights starting Wednesday, international crude benchmarks responded with volatility. Brent crude futures for November delivery rose more than 1% to $101.53 per barrel, while U.S. West Texas Intermediate futures gained 0.7% to $96.45 a barrel.
Amid ongoing conflicts in the Middle East, President Donald Trump is set to attend the United Nations General Assembly on Tuesday, where he is scheduled to meet with a number of world leaders.