Oil Prices Jump After Trump’s Latest Iran Threat
Bond markets remained volatile, as investors assessed the geopolitical turmoil.
Bond market volatility returned in force on Thursday, with a jump in U.S. government yields erasing nearly all of the decline the previous day, when the Treasury Department announced an effort to rein in rising borrowing costs . Anxiety about the war in Iran, the state of the economy and government finances fueled the sell-off.
Oil prices rose to their highest levels in a month on Thursday after President Trump claimed he would level “ tremendous economic consequences ” on countries that did business with Iran. Without naming countries or details on possible actions, Mr. Trump said on social media on Wednesday suggested he could target countries that buy Iranian oil.
The yields on U.S. government bonds rose on Thursday, as the effects of the Treasury Department’s latest effort to rein in borrowing costs faded.
The 10-year Treasury yield, a widely influential interest rate that underpins mortgages, business loans and many other types of debt, rose around 0.05 percentage points to 4.7 percent, reversing a dip in yields on Wednesday, when the Treasury doubled the amount of debt it was authorized to buy back from investors in weekly operations.
Investors are worried about the war in Iran’s effect on inflation, large government deficits and rampant borrowing to finance artificial intelligence infrastructure, which have all put upward pressure on yields. On Wednesday, America’s gross national debt crossed $40 trillion for the first time.
The price of Brent crude, the global benchmark for oil, rose about 2 percent to more $93.5 a barrel.
