U.S. Treasury yields rise as Israel-Iran attacks heighten

U.S. Treasury yields rose on Friday in the wake of Israeli airstrikes on Iran that drove up energy prices and led to concern that inflation may move higher.

The yield on the benchmark 10-year Treasury moved up more than 5 basis points to 4.411%, while 2-year yields rose more than 4.5 basis points to 3.954%.

One basis point equals 0.01%. Bond yields and prices move inversely, meaning Treasury prices were lower Friday.

Friday’s moves came after Israel launched a series of airstrikes on Iran, hitting sites linked to Iran’s nuclear program. The attacks killed Mohammad Hossein Bagheri, head of the Iranian Armed Forces, as well as Hossein Salami, chief of Iran’s Islamic Revolutionary Guard Corps, according to Iranian state media. Two of Iran’s top nuclear scientists were also reportedly killed in the airstrikes.

Ali Khamenei, Iran’s supreme leader, vowed to retaliate. A state of emergency was declared in Israel, with civilians warned that a missile and drone attack against Israel was anticipated “in the immediate future.”

Tensions were exacerbated Friday afternoon after Israel Defense Forces said that Iran launched missiles toward Israel in retaliation for Israel’s airstrikes against Iran. Iranian state television said Friday afternoon that Iran will not participate in the sixth round of nuclear negotiations with the U.S. scheduled for this weekend in Oman.

U.S. President Donald Trump earlier Friday had warned in a Truth Social post that Iran must come to the negotiating table.

“There has already been great death and destruction, but there is still time to make this slaughter, with the next already planned attacks being even more brutal, come to an end. Iran must make a deal, before there is nothing left, and save what was once known as the Iranian Empire,” Trump wrote. “No more death, no more destruction, JUST DO IT, BEFORE IT IS TOO LATE.”

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