Global sovereign bond yields pulled back across Asian and European markets on Thursday, interrupting several days of selling as investors assessed the Federal Reserve’s interest-rate decision and signs of possible diplomatic progress in the Middle East. The benchmark U.S. 10-year Treasury yield declined for the first time in nine sessions, retreating from above 5% to around 4.96%, while the two-year yield eased for the first time in eight sessions after reaching its highest level since July 2024. The move reflected renewed demand for duration, or longer-maturity bonds, after Federal Reserve Chair Kevin Warsh raised rates by 25 basis points to 3.75%-4% on Wednesday. Bond desks viewed Warsh’s approach as reassuring because it emphasized the Fed’s focus on anchoring long-term inflation expectations and maintaining institutional independence despite political pressure from the Trump administration. Longer-term yields also benefited from President Donald Trump’s optimism that the seven-month Iran war could end soon and that Tehran wants a deal. Reports that Trump is scheduled to meet key Gulf leaders during the upcoming UN General Assembly helped reduce term premia, the extra yield investors demand for holding longer-dated bonds, which had risen amid triple-digit crude oil prices and Persian Gulf supply disruptions. The reprieve remains tentative as major central-bank decisions continue. In London, the 10-year gilt yield was near a one-week low of 5.304%, and the two-year gilt yield was also at a one-week low of 4.763% ahead of Threadneedle Street’s policy announcement and Governor Andrew Bailey’s guidance. Traders were weighing final Eurozone CPI data, U.K. inflation of 3.1%, the possibility of an autumn Bank of England rate increase and whether the central bank might slow active quantitative tightening, or the reduction of its bond holdings, to ease pressure on longer maturities. The Bank of Japan is due to take center stage on Friday, with money markets pricing an 80% chance of a 25-basis-point increase to 1.25%, keeping global yield baselines structurally elevated.