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US 10-year yields rise as market sells duration after Iran strikes
The 10-year yield trades near 4.79%, while the 2-year pushes toward 4.39% in a fifth straight day of selling, with futures pricing a near-68% chance of a September 16 hike.
US Treasury yields extended higher as investors sold duration after American forces began striking Islamic Revolutionary Guard Corps targets inside Iran, a move that pushed the 10-year yield to around 4.79%, about four basis points higher and near its highest level since January 2025.
The front end rose even faster, with the 2-year yield adding closer to five basis points to trade near 4.39% for a fifth consecutive session of selling. The commentary highlighted that the 2-year led the repricing, which differs from how markets typically price a pure “war risk” duration bid.
The 30-year yield was steadier, sitting near 5.28% after previously dropping toward 5.19% when the Treasury Department increased the maximum size of its long-dated buyback operation in August from $2 billion to at least $4 billion through November. The move has since been fully unwound within a fortnight.
Broader rate expectations also shifted: the piece noted that Japan’s 10-year touched 3% for the first time since 1996, and long ends in France and Germany rose to multi-year highs. It added that futures now price a roughly 68% chance of a hike at the September 16 meeting, compared with about 35% before the Jackson Hole keynote.