Iran war pushes bond yields higher | Cumberland Comment
Excerpt from the article:
The war against Iran began its fourth week last Sunday. We have seen bond yields rise in both taxable and tax-free bond markets, reflecting mostly the rise in the cost of oil due to shipping stoppages through the Strait of Hormuz. You can see the jump from roughly $70/barrel spiking to over $115/barrel, a 65% increase.
Some observations. While all yields are higher, short-term yields have risen more than longer-term yields. Two-year Treasury bond yields are about 55 basis points higher, while 10-year yields are approximately 45 basis points higher.
The factors weighing on the bond market prior to the war were concerns about AI’s impacts on software companies and service companies and the fallout being seen in private credit, all of which was taking bond yields lower, and indeed 10-year Treasury bond yields to levels below 4%. All of that has been changed by the war and concern over the oil not being shipped through the Strait of Hormuz.
Click here to read the full article on the The Sarasota Herald Tribune website.
John R. Mousseau, CFA
Chief Investment Officer
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