US Treasury Yields Rise as Trump Rejects Iran Truce

US Treasury yields rose in Asian trade on Monday following a diplomatic stalemate between the United States and Iran. Donald Trump rejected a truce proposal from Iran, prompting peace negotiators to demand concessions regarding the Iranian nuclear program as a prerequisite for reviving ceasefire talks.

The geopolitical tension triggered a 3.4% surge in front-month Brent oil prices, which reached $107.91 per barrel. This spike in energy costs intensified inflationary pressures, leading money markets to price in a 68% probability that the Federal Reserve will implement a 25-basis-point interest rate increase in October.

As a result of these market expectations, the 10-year Treasury yield increased by 3 basis points to 5.210%.