U.S. Treasury yields fall as traders weigh inflation data and Middle East risks

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US Treasury yields fall on inflation and risks

Highlights

Treasury yields fell Friday with the 10-year at 4.5254%, 2-year at 4.1134%, and 30-year at 5.0680% as economic data showed cooler inflation.
U.S. jobless claims for the week ending July 11 were lower than forecast at 208,000, signaling continued labor market resilience.
Escalating U.S.-Iran tensions lifted West Texas Intermediate up 0.73% to $79.53 and Brent crude up 0.24% to $84.49, fueling concern about energy-driven inflation risks.

Bond market moves and economic signals

As reported by CNBC, Treasury yields are falling Friday as traders assess a run of U.S. economic data suggesting the economy continues to absorb inflation pressures linked to the Iran war.

The yield on the 10-year Treasury note, a key benchmark for mortgages, auto loans and credit card debt, is down more than 4 basis points at 4.5254% in early trading. The 2-year Treasury yield, which is closely tied to expectations for Federal Reserve policy, is also lower by 4 basis points at 4.1134%, while the 30-year yield is down more than 2 basis points at 5.0680%.

The drop in yields follows cooler-than-expected producer and consumer price data released this week. U.S. jobless claims for the week ending July 11 also come in below forecasts at a seasonally adjusted 208,000.

Geopolitical tensions and market impact

Investors continue to monitor escalating tensions between the U.S. and Iran after fresh overnight hostilities in the Middle East. The conflict is lifting energy prices and is keeping attention on how higher oil costs could affect the Federal Reserve's interest-rate path.

U.S. West Texas Intermediate futures for August delivery are last up 0.73% at $79.53, while Brent crude, the international benchmark, is 0.24% higher at $84.49. Bond yields had surged in Thursday's session after Washington and Tehran exchanged new strikes earlier and threatened infrastructure assets in the region.

Markets are also looking ahead to Friday's U.S. housing starts and building permit data for June, which could offer another signal on domestic economic momentum.

In our earlier report on the tech sell-off tied to AI valuation concerns, we described how investors pulled back from chip and storage names as positioning unwound and risk appetite weakened. We also noted that renewed U.S.-Iran hostilities pushed oil prices higher, reviving inflation worries that weighed on U.S. equities and added uncertainty around the Federal Reserve’s policy outlook.

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