By Matt Tracy

May 20 (Reuters) - Yields on U.S. Treasuries ticked lower on Wednesday following a selloff in the previous session, as uncertainty persisted around the war with Iran and the path of inflation.

The yield on the benchmark 10-year Treasury note US10YT=RR was last down two basis points on the day at 4.647%. It reached its highest level since January 2025 on Tuesday, surging to 4.687%.

The 30-year Treasury bond's yield US30YT=RR, which is seen as a barometer of geopolitical and fiscal risk, was last down roughly 1 bp at 5.173%. It briefly touched 5.197% on Tuesday, its highest since July 2007 before the Global Financial Crisis.

A selloff in U.S. and global bond markets has taken hold over the past week as peace talks between the U.S. and Iran have stalled and energy prices have remained elevated since the war started in late February. Brent crude oil LCOc1 prices were just over $108 per barrel on Wednesday after hitting $111 per barrel on Monday.

The 2-year Treasury note yield US2YT=RR, which typically moves in step with interest rate expectations for the Federal Reserve, was last down 2.7 bps at 4.095%.

A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes US2US10=RR, seen as an indicator of economic expectations, was last at 54.39 bps.

Investors are now pricing in a 48.6% chance the Fed could raise rates in December, and an 89.6% chance it maintains current rates at its next meeting in June, according to the CME FedWatch tool.

Minutes from the Fed's April Federal Open Market Committee meeting will be released later on Wednesday.

The Treasury Department is slated to auction 20-year US20YT=RR bonds on Wednesday, which market participants will watch closely for signs of any cooling investor demand.