U.S. Treasury yields followed oil prices lower on Monday as investors monitor signs of de-escalation in the Iran conflict.

The yield on the 10-year U.S. Treasury note — the key benchmark for U.S. government borrowing — fell over 1 basis point to 4.688%.

The 2-year Treasury note yield, which more closely tracks short-term Federal Reserve interest rate policy, fell 4 basis points to 4.252%. The longer-dated 30-year Treasury bond yield fell over 4 basis points to 5.226%.

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

It came as oil prices slumped on Monday following President Donald Trump's claims that negotiations with Iran will begin again, after the U.S. held off on fresh strikes against the Islamic Republic at the request of Gulf allies.

However, Iranian foreign ministry spokesperson Esmail Baghaei again poured cold water on the notion of direct negotiations with the United States.

Baghaei told a press conference on Monday that there is no immediate plan for negotiations with the U.S., reiterating that Tehran is currently only engaged in talks with Oman regarding the Strait of Hormuz.

Last week, the 30-year Treasury yield rose to its highest level since 2007 as investors reacted to an apparently "hawkish hold" from Federal Reserve interest rate setters.

Some Fed officials said Friday that they favor raising rates to help ease inflation. Those officials voted against the central bank's decision in a 9-3 vote on Wednesday to hold its key interest rate steady in a range of 3.5% to 3.75%.

"While the decline in short-dated yields reflects a more dovish near-term policy outlook, the rise in long-end yields signals growing concern that Chair Warsh may prove unwilling to act aggressively enough should inflation remain elevated," said Seema Shah, chief global strategist at Principal Asset Management. "The bond market is effectively testing the Fed's credibility."

Monday's data highlight is manufacturing PMI data for July, released at 3:00 p.m. ET.