Lates News

Due to the escalation of tensions between Iran and the United States, concerns about inflation have intensified and disrupted traders' expectations for the Federal Reserve's policy path, leading to a surge in US Treasury bond volatility to a nine-month high. The ICE BofA Merrill Lynch US Treasury Market Volatility Index, also known as the "fear gauge" of the bond market, has climbed to its highest level since last June. Rising oil prices have exacerbated concerns about inflation and undermined the real returns of US Treasuries, limiting their safe haven appeal. Both President Trump and Iran have taken a hardline stance on war, bringing uncertainty to the duration of the conflict. The yield on the 30-year US Treasury bond, sensitive to inflation dynamics and government spending, has risen to its highest level in a month, and traders have reduced their bets on a Fed rate cut in 2026. A portfolio manager at Brandywine Global Investment Management said, "As bond investors, we must start thinking from the perspective of stagflation, which will always bring huge uncertainty. So from a volatility perspective, I need to be compensated."