After Israeli military actions against Iran, the 10-year Treasury yield experienced a 9 basis point increase. This reaction mirrors past instances when Israel-Iran tensions led to extended high yields. As oil prices spiked, the markets began to show classic patterns, with shivers felt across financial sectors.
With rising oil prices, inflation concerns intensified, driven in part by former President Trump’s trade policies. The US Treasury’s outlook now shows bondholders seeking higher returns, and recent geopolitical unrest is amplifying these pressures. The yield curve is steepening due to expectations of future inflation.
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