FX.co ★ US 10-Year Yield Hits 17-Month Low

The yield on the US 10-year Treasury note fell to around 3.93% on Monday, its lowest level since September 2024, as the escalating conflict in the Middle East boosted demand for safe-haven assets. Over the weekend, the US and Israel launched military strikes on Iran that killed the country’s Supreme Leader, Ayatollah Ali Khamenei, and effectively shut the Strait of Hormuz. Tehran responded by attacking US assets across the region, heightening concerns about a wider war. At the same time, data released on Friday showed that US producer prices rose more than expected in January, suggesting that companies are passing higher tariff-related costs on to consumers and complicating the Federal Reserve’s path toward interest rate cuts. Even so, markets are still pricing in two 25-basis-point cuts this year, amid speculation that recent market turmoil could push the Fed toward a more accommodative stance.