Treasury yields move higher as oil prices rise amid U.S.-Iran standoff

Treasury yields moved higher on Thursday as tensions between the U.S. and Iran with the Strait of Hormuz reignited inflation fears.

The yield on the 10-year U.S. Treasury note — the key benchmark for U.S. government borrowing — rose more than 3 basis points to 4.325%.

The 2-year Treasury note yield, which more closely tracks short-term Federal Reserve interest rate policy, was also up more than 3 basis points at 3.832%. The longer-dated 30-year Treasury bond yield added more than 1 basis point to 4.919%.

One basis point is equal to 0.01%, and yields and prices move in opposite directions.

On Thursday, U.S. forces seized a sanctioned tanker carrying Iranian oil in the Indian Ocean. A day earlier, Iran’s navy said that it had seized two container ships in the Strait of Hormuz, casting doubt upon an already fragile ceasefire.

Iran’s Revolutionary Guard Navy said in a statement that it had seized the ships for what it claimed were maritime violations and transferred them to Iranian shores, according to state media. CNBC could not independently verify the claim.

The announcement came after U.K. maritime authorities said two ships had been attacked in the Strait of Hormuz. Iranian media reported a third vessel had also been targeted by the country’s military.

The attacks come shortly after President Donald Trump said the U.S. would extend the ceasefire with Iran to allow for the Islamic Republic’s leaders to submit a “unified proposal” to end the war.

Complicating the situation, however, was Iran’s parliament speaker resigning from the negotiating team, according to Israel’s N12 news. The report, which CNBC has not confirmed, boosted oil prices. Brent crude futures rose 3.1% to close at $105.07 per barrel, while West Texas Intermediate futures gained 3.11% to settle at $95.85 per barrel.

— CNBC’s Sam Meredith, Spencer Kimball and Jason Gewirtz also contributed to this report.