an]dyzr]jj{f0pj)y)33b{27_media_dl_1.png BloombergArticle content(Bloomberg) — Treasuries sank on signs of a roadblock in peace negotiations between the US and Iran, fueling concern that higher energy costs will stoke inflation and push the Federal Reserve to raise interest rates.
Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe selloff on Monday sent yields in the $31 trillion US Treasuries market higher, with those on 10-year securities up about six basis points to nearly 4.5% as crude oil jumped more than 5%. Two-year yields, which are most sensitive to Fed policy expectations, rose about six basis points to 4.07% after Iran’s semi-official Tasnim news agency reported that Tehran would suspend message exchanges with Washington in protest over Israel’s actions.
Article contentWe apologize, but this video has failed to load.Try refreshing your browser, or tap here to see other videos from our team.Article contentArticle contentTraders boosted their expectations that the Fed’s next move on interest rates will be a hike. Interest-rate swaps showed that traders have fully priced in a hike by March 2027 and see a 50% chance of a move as early as October.
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Article contentTreasuries have rallied in recent weeks as optimism grew that the US and Iran were making progress toward a deal that would lead to the reopening of the Strait of Hormuz, a critical chokepoint for global energy flows. The latest report, however, casts doubt on that outlook, raising the prospect that oil prices could remain higher for longer and add further inflationary pressure.
Article content“The market has been very optimistic in its assessment over the past week that the US-Iran agreement is a done deal,” said Gennadiy Goldberg, head of US rates strategy at TD Securities. “This leaves markets highly sensitive to any negative news, particularly today’s headlines that Iran has stopped talking to the US.”
Article content—With assistance from Edward Bolingbroke.
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