Construction work continues at the Marriner S. Eccles Federal Reserve building in Washington, DC, on Dec. 30, 2025.
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Treasury yields ticked higher Tuesday as investors await clarity over an expected second round of peace talks due to take place between the U.S. and Iran.
The yield on the 10-year U.S. Treasury note — the key benchmark for U.S. government borrowing — was up more than 6 basis points at 4.313%.
The 2-year Treasury note yield, which more closely tracks short-term Federal Reserve interest rate policy, was more than 8 basis points higher at 3.802%. The longer-dated 30-year Treasury bond yield climbed more than 3 basis points to 4.916%.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
Monday saw a spate of mixed messages from both administrations, as Iran held off committing to further negotiations amid threats of overwhelming military force from President Donald Trump.
On Tuesday, Iranian state media reported that Iran would not be attending peace talks in Islamabad, saying that attending them is a “waste of time.”
That followed Trump’s pronouncement that “lots of bombs [will] start going off” if no deal is reached before the shaky ceasefire expires.
Investors also face uncertainty over the exact expiration date of the ceasefire.
The two-week deal agreed between the U.S. and Iran is set to expire Wednesday. Trump told Bloomberg on Monday that the truce would end “Wednesday evening Washington time.”
Elsewhere, traders monitored Federal Reserve chair nominee Kevin Warsh’s confirmation hearing on Tuesday. During the hearing, Warsh said Trump has never asked him to “predetermine, commit, fix, decide on any interest rate decision in any of our discussions” and that he wouldn’t agree to ever make such a decision simply because the president asked him to.
In his prepared statement to the Senate Banking committee released Monday, the former Fed governor said the U.S. central bank must be largely independent of political influence, while also staying focused on its primary goals.
“The Fed must stay in its lane,” he said. “Fed independence is placed at greatest risk when it strays into fiscal and social policies where it has neither authority nor expertise.”
Trump told CNBC Tuesday he’ll be disappointed if Warsh doesn’t immediately cut rates if appointed as the central bank’s chief.
— CNBC’s Lisa Kailai Han and Justina Lee also contributed to this report.
