By James Hirai

(Bloomberg) -- Treasuries gained as a decline in oil prices and dovish comments from Federal Reserve officials boosted bets on US interest-rate cuts.

Most Read from Bloomberg

• Bezos Wedding Draws Protests, Soul-Searching Over Tourism in Venice

• US State Budget Wounds Intensify From Trump, DOGE Policy Shifts

The two-year yield fell three basis points to 3.83%. Money markets fully priced in two quarter-point cuts from the Fed by the end of the year and a 25% chance of a third reduction, up from 13% on Monday. Traders also lifted the probability of a move in July to 20% from zero a week ago.

The ceasefire agreed between Israel and Iran following a more than week-long conflict pushed oil prices lower on Tuesday, easing policymaker and market concerns about it stoking inflation. The dollar fell, while stocks and risk-sensitive currencies gained.

Markets will soon turn their attention to Fed Chair Jerome Powell’s testimony at the House Financial Services Committee later on the day. Traders are looking for clues on how soon the central bank may ease cut rates after governors Christopher Waller and Michelle Bowman recently said they might support a reduction in July.

“We are not in the July camp, but do believe that data should show signs of weakness over the summer months and hence prompt a rate cut in September,” Mohit Kumar, chief European strategist at Jefferies wrote in a client note.

In addition to Powell, there are six other Fed speakers lined up Tuesday including John Williams, Susan Collins and Michael Barr. Also the Treasury will sell $69 billion of new US two-year notes at 1 p.m. ET.

Long-end Treasuries underperformed, with the 30-year yield rising two basis points to 4.89%. That follows an eight basis-point jump in similar-dated German bonds after the nation announced plans to borrow more in the third quarter to fund a surge in spending.

Most Read from Bloomberg Businessweek

• Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags

• Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028?

• Ken Griffin on Trump, Harvard and Why Novice Investors Won’t Beat the Pros

• Can ‘MAMUWT’ Be to Musk What ‘TACO’ Is to Trump?