Trump reiterates Iran infrastructure threat

The 10-year Treasury yield — the benchmark for U.S. government borrowing — was less than 1 basis point higher at 4.341%.

The yield on the 2-year Treasury note, which are more sensitive to short-term Federal Reserve rate decisions, was also up by less than 1 basis point at 3.852%. The 30-year bond yield, meanwhile, rose more than 1 basis point, reaching 4.903%.

One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely to one another.

The rise in the cost of borrowing followed Trump’s repeated threat to bomb Iranian infrastructure, including power plants and bridges, if Tehran did not reopen the Strait of Hormuz by 8:00 p.m. ET on Tuesday.

Trump said it was “highly unlikely” he would extend the deadline further, and warned of “the complete demolition” of Iran’s critical infrastructure should a deal not be reached.

Iranian officials have rejected plans for a temporary ceasefire and have instead called for a permanent end to the conflict.

Energy prices have notched higher as Tuesday’s deadline approaches. Brent crude futures, the global benchmark, rose nearly 1%, trading above $110 a barrel. U.S. West Texas Intermediate futures were last seen 2% higher at above $114 a barrel.

The rally in U.S. Treasurys came after yields had steadied on the back of a more positive-than-expected nonfarm payrolls data published on Friday.

Several Treasury officials will be speaking on Tuesday. Chicago Federal Reserve president and CEO Austan Goolsbee will be speaking at the Detroit Economic Club on Tuesday. On Monday, Goolsbee said inflation remains a greater challenge for the U.S. economy than employment. Federal Reserve vice chair Philip Jefferson will also speak later on the outlook for the economy and labor market.

Investors will be monitoring U.S.-manufactured durable goods orders data releases for February, which are expected to come in lower than the flat print for January.