U.S. Treasury yields experienced a decline on April 17, 2023, driven by increasing optimism that the Iran war may be nearing a resolution, which has alleviated inflation concerns. The yield on the 2-year Treasury note decreased by 7.6 basis points to 3.702%, while the benchmark 10-year note fell by 5.9 basis points to 4.25%. Traders are now pricing in approximately a 50% chance of an interest rate cut by the Federal Reserve by the end of the year, a significant increase from just 30% the previous day. This shift in expectations follows a ceasefire agreement in Lebanon, with Iranian Foreign Minister Abbas Araqchi confirming that the Strait of Hormuz remains open, a critical transit route for global oil and liquefied natural gas. U.S. President Donald Trump expressed optimism about potential talks to end the conflict soon, contributing to a 11% drop in oil prices. Federal Reserve officials, including San Francisco Fed President Mary Daly, acknowledge the challenges posed by the Iran war on inflation but remain cautiously optimistic about its short-term duration. Additionally, Kevin Warsh, Trump's nominee for Fed Chair, is set to face a Senate confirmation hearing on April 21, with expectations that he may advocate for further interest rate cuts.