The 10-year Treasury yield is down by 3.5 bps on Wednesday to 4.136% amid rising safe-haven demand spurred by elevated geopolitical tensions. The yield on Treasuries moves in the opposite direction of their prices.
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Growing unrest in Iran has captured the attention of President Trump, who said earlier this week that “help is on its way” for protesters. That could mark the beginning of American involvement in another Middle Eastern conflict, although Trump hasn’t specified how he will address the situation yet.
Stock Market Volatility Leads to Demand for Treasuries
Furthermore, both the S&P 500 (SPX) and the Nasdaq 100 (NDX) have pulled back in recent days, depressing investors’ appetite for risk and shifting capital into safer assets, like bonds and commodities.
An inflation report from the Bureau of Labor Statistics (BLS) this morning contributed to the market decline, showing Producer Price Index (PPI) rising by 3% annually, above the consensus estimate of 2.7%. While elevated inflation typically pushes yields higher because investors demand greater compensation for lost purchasing power, safe-haven demand dominated on Wednesday, sending yields lower.
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