U.S. Treasury yields nudge higher as Israel-Iran conflict puts markets on edge
U.S. Treasury yields were slightly higher early Monday as global markets continue to react to deadly air strikes being exchanged between Israel and Iran.
The 2-year Treasury yield rose nearly 2 basis points to 3.974%, while the yield on the benchmark 10-year Treasury was 1 basis point higher, at 4.432%.
One basis point equals 0.01%. Bond yields and prices move inversely.
Treasury yields climbed sharply on Friday after Israel launched strikes on Iran, targeting locations it said were linked to its nuclear program.
Initial market moves saw oil prices spike, the U.S. dollar and gold rally, and stock markets decline.
Tensions showed little sign of abating over the weekend and into Monday, as casualties mounted on both sides and scheduled talks on Iran's nuclear program were canceled.
Crude oil prices were volatile but last higher on Monday, with U.S. West Texas Intermediate up another 0.7% to $73.50 per barrel, and global benchmark Brent up 0.48%, at $74.64 per barrel. Israeli unmanned aerial vehicles struck the South Pars gas field in southern Iran on Saturday, according to Iranian state media reports.
The rise in oil rates has stoked fears of a resurgence in U.S. inflation. Investors were already on edge over the prospect of price rises in light of White House tariff policy, though the May consumer price index reading came in cooler than expected.
The Federal Reserve will hold its latest policy meeting this week. The market is expecting a more than 96% chance of a rate hold, according to the CME FedWatch Tool.
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