(Bloomberg) — The bid for Treasuries that swept through markets ahead of the weekend is unwinding amid hopes the conflict between Iran and Israel will now calm, with attention returning to the inflationary forces dogging the world economy.
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The yield on 10-year securities rose as much as six basis points to 4.58% on Monday, more than halving Friday’s drop and edging back toward a five-month high touched last week.
The move reflects relief that Israel has so far chosen not to retaliate against Iran’s unprecedented attack, but also underscores the fear that instability in the Middle East will drive oil prices higher and heighten renewed worries about sticky inflation.
That could push back the expected start date for the Federal Reserve’s first rate cut even further. A string of hot US consumer price readings has already forced traders to reprice their expectations, and they are now betting the Fed will wait…
