Treasury Yields Surge as US-Iran Conflict Escalates

US Treasury yields rose on Monday after the US and Iran resumed military attacks against each other. The yield on the benchmark 10-year Treasury note increased by 3.6 basis points to 4.758%, its highest level since January 15, 2025.

The move comes as Federal Reserve Chair Kevin Warsh's hawkish comments last week raised expectations for a rate hike of at least 25 basis points at the Fed's upcoming meeting, with a probability of 66.1% according to CME FedWatch.

Crude prices have been persistently high since the war with Iran began, driving inflation and yields higher due to investors' anticipation of sustained price pressures and the need for the US Fed to raise short-term interest rates to dampen these effects.