On Tuesday, Treasury yields increased significantly, with the 30-year yield reaching approximately 5.322%, the highest since 2002. The 10-year Treasury note yield, a key benchmark for various loans, rose to 4.736%.
The rise in yields is attributed to ongoing tensions between the U.S. and Iran, particularly after Iran dismissed the possibility of extending a peace deal deadline, raising concerns about potential disruptions in the Strait of Hormuz. Deutsche Bank's Jim Rid noted that the market is reacting to these geopolitical developments, leading to declines in both bonds and equities.
Additionally, inflation fears are contributing to higher government borrowing costs globally, with many countries experiencing multi-decade high yields. Investors are also awaiting economic data on import and export pricing, housing starts, and pending home sales, which could further influence market sentiment