U.S. Airstrike on Iran Sends Oil Prices Soaring Again... What to Watch Now Is Treasury Yields [Weekend Money]
Inflation Concerns Reignite
U.S. Treasury Yields Near Previous Highs
Caution Needed as Asset Market Pressures Grow
As international oil prices are surging following a U.S. airstrike on Iran, some analysts suggest that the key indicator to watch now is the government bond yield.
![U.S. Airstrike on Iran Sends Oil Prices Soaring Again... What to Watch Now Is Treasury Yields [Weekend Money]](http://www.asiae.co.kr/news/img_view.htm?img=2026070814420338771_1783489323.png)
According to iM Securities on July 11, international oil prices, which had been stabilizing downward, soared sharply due to the U.S. military's airstrike on Iran. The price of West Texas Intermediate (WTI), which had fallen to the $68 per barrel range, jumped to around $74. During intraday trading on July 8, it even surpassed $76.
Except for the bond market, other financial markets do not appear to be taking the situation very seriously. This is because U.S. President Donald Trump stated, "No matter what happens, it will be over very quickly." In fact, the U.S. dollar and the Nasdaq Index maintained a strong tone, while the Philadelphia Semiconductor Index rebounded.
In contrast, the bond market reacted somewhat sensitively. The yield on the U.S. 10-year Treasury note, which had dropped to around 4.3% during the recent oil price decline, surged again to 4.57%. This figure is close to the high of 4.6663% recorded on May 19, after the U.S.-Iran war. This is seen as reflecting concerns that the spike in oil prices could once again increase inflationary pressures.
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Park Sang-hyun, a researcher at iM Securities, said, "According to last month’s Federal Open Market Committee (FOMC) minutes, the tone was not as hawkish as some feared. Although some participants suggested a rate hike, it is known that all participants supported holding rates steady." He added, "The fact that Treasury yields rose despite the Federal Reserve easing concerns about rate hikes reflects inflation worries stemming from rising oil prices." Park went on to say, "It is burdensome for the financial markets that the 10-year Treasury yield is nearing its previous high of 4.6663%. We must be wary of the possibility that additional increases in Treasury yields could once again amplify instability in the financial and asset markets."
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