U.S. Treasury yields rose on Friday in the wake of Israeli airstrikes on Iran that drove up energy prices and led to concern that inflation may move higher.
The yield on the benchmark 10-year Treasury moved up more than 3 basis points to 4.389%, while 2-year yields rose nearly 4 basis points to 3.945%.
One basis point equals 0.01%. Bond yields and prices move inversely, meaning Treasury prices were lower Friday.
| Symbol | Company | Yield | Change |
|---|---|---|---|
| US10Y | U.S. 10 Year Treasury | 4.446% | +0.089 |
| US1M | U.S. 1 Month Treasury | 4.196% | +0.034 |
| US1Y | U.S. 1 Year Treasury | 4.103% | +0.042 |
| US2Y | U.S. 2 Year Treasury | 3.977% | +0.071 |
| US30Y | U.S. 30 Year Treasury | 4.939% | +0.096 |
| US3M | U.S. 3 Month Treasury | 4.372% | -0.009 |
| US6M | U.S. 6 Month Treasury | 4.296% | +0.02 |
Thomas Matthews, head of markets for Asia Pacific at Capital Economics, said in a note after the attacks that a sustained jump in oil prices could hurt Treasurys if it leads to higher inflation expectations.
“In the event that the conflict leads to a sustained period of higher oil prices the upside risks to Treasury yields (and government bond yields more broadly) would intensify. Long-term inflation break-evens have not moved much so far. But over longer time horizons, they tend to move closely with oil prices,” Matthews wrote.
Friday’s moves came after Israel launched a series of airstrikes on Iran, hitting sites linked to Iran’s nuclear program.
The attacks killed Mohammad Hossein Bagheri, head of the Iranian Armed Forces, as well as Hossein Salami, chief of Iran’s Islamic Revolutionary Guard Corps, according to Iranian state media. Two of Iran’s top nuclear scientists were also reportedly killed in the airstrikes.
Ali Khamenei, Iran’s supreme leader, vowed to retaliate. A state of emergency was declared in Israel, with civilians warned that a missile and drone attack against Israel was anticipated “in the immediate future.”
U.S. President Donald Trump warned in a Truth Social post that Iran must come to the negotiating table. U.S.-Iran talks over its nuclear program had been scheduled to take place in Oman this weekend.
“There has already been great death and destruction, but there is still time to make this slaughter, with the next already planned attacks being even more brutal, come to an end. Iran must make a deal, before there is nothing left, and save what was once known as the Iranian Empire,” Trump wrote. “No more death, no more destruction, JUST DO IT, BEFORE IT IS TOO LATE.”
