US Treasury yields stay steady amid renewed US‑Iran conflict

A Reuters poll of bond strategists finds that, despite renewed hostilities in the US‑Israeli war with Iran and a near‑10% jump in oil prices, most expect the front end of the US Treasury curve to hold or edge lower. The 10‑year yield was around 4.6% this week but is forecast to stabilise near 4.48% in the next three to six months, while the two‑year is projected to fall to about 4.00% after currently sitting near 4.20%. Strategists such as Joseph Purtell (Neuberger Berman) argue that market expectations of one to two Fed rate hikes are excessive and that yields should remain broadly stable.

At the same time, Australian Treasurer Jim Chalmers warned that the breakdown of the cease‑fire between the US and Iran threatens global growth and could reignite inflation pressures. The IMF identified the renewed Middle‑East conflict as the single largest risk to the world economic outlook, noting potential commodity price volatility and supply‑chain disruptions. While oil prices rose to $79‑$120 a barrel, Australian fuel prices have stayed relatively unchanged after recent excise cuts. Both US and Australian officials stress that a swift resolution is essential to curb further economic fallout.