31.03.202612:06:34UTC+00US 10-Year Yield Falls Further from 8-Month High

The yield on the 10-year US Treasury note fell to 4.3% on Tuesday, extending its decline from the eight-month high of 4.44% reached two sessions earlier, as concerns about economic growth moved to the forefront for investors. The rebound in Treasury prices underscored the high level of uncertainty surrounding the impact of the war in the Persian Gulf on the US economy.

Recent attacks by Iran on tankers in the region have reinforced expectations that supply disruptions from the Persian Gulf could persist. However, mounting fears that the conflict could derail global growth have tempered the inflationary impact on bond yields. The 10-year yield had risen as much as 40 basis points in March before this week’s pullback, tracking a surge in energy prices that could force the Federal Reserve to keep interest rates in restrictive territory for longer.

At the same time, increased US involvement in the conflict has heightened expectations for wider federal deficits after the Pentagon requested a larger defense budget, adding further pressure on the bond market.