10-Year US Treasury Yield Flipflops as Iran War Starts
10-Year US Treasury Yield Flipflops, Spikes by 14 Basis Points to 4.07%, after Plunging to 3.93%, amid Massive Volatility
by Wolf Richter
Mar 2, 2026 (Monday)
It undid more than the entire 'haven trade' that had started on Thursday, and blew through the hot PPI inflation on Friday.
It then backtracked up on more than the entire plunge from 4.05% early Thursday, to 3.95% at the close on Friday, despite a hot PPI reading Friday morning, to below 3.93% in overnight trading on Sunday, amid massive but short-lived demand, after the US and Israel had started bombing Iran over the weekend (hourly chart via Investing.com).
Market memes flipflopped vigorously from searching for a haven, as stocks were getting rattled, and damn the inflation torpedoes that the hot services PPI on Friday warned about, and started searching for more haven after the Iran bombing had started, then to suddenly worrying about these damned inflation torpedoes all over again that could be made worse by the consequences of the Iran war on energy prices !
Rising bond yields mean falling bond prices; falling yields mean rising bond prices. That may not be a big deal for regular bond holders, especially those intending to hold to maturity when they get paid face value.
But much of the Treasury market is tangled up in highly leveraged complex trades and repurchase agreements, and those sudden moves can make substantial ripples in potential 'paper profits' or portfolio values at the end of the month when 'statements' are sent out.
Markets do what they do because they do it. Why exactly they ignored the hot PPI inflation reading on Friday, and went all in on the haven trade, then flipflopped like this today on the haven trade and refocused on inflation, or whatever, remains the subject of speculation.
- -
[* Inside war information can be used to 'trade against' other players, or nervous nellies, or just market sentiment. And that can be done by Selling Option Puts at a low, and Selling Option Calls at a top; or Buying Puts at a top, and Buying Calls at a low. Then, by 'artificially creating volatility' using 'high frequency trading' with computers, 'opportunities' can be created if you know 'which way' you want to trade on that 'inside information' and the expected 'market reaction' ! ]
- -
One thing is for sure: at these below 4% 10-year Treasury yields, demand vanished, and yields are having to move higher today to find buyers. And they could of course re-flipflop for whatever reason. But these still very low yields – amid rising inflation and massive supply issues facing the Treasury market – are mightily unappetizing to this bond investor.
And look what that did to mortgage rates today: The average 30-year fixed mortgage rate spiked by 13 basis points this morning from Friday, to 6.12%, according to Mortgage News Daily.
[ https ://wolfstreet.com/2026/03/02/10-year-us-treasury-yield-flipflops-spikes-by-14-basis-points-to-4-07-after-plunging-to-3-93/ ]
[* Wolf has studied the used and new car markets, the Real Estate markets, and the financial markets, for like 30 years !!! and has a most excellent site for these subjects, and his commenters are also very knowledgeable !!! (many of them anyway !) and I give him a 5 star rating !!! ]
[* My Comment : When war breaks out, financial markets become active and volatile in reaction to news etc. as you all very likely know quite well. From studying for an NASD Series 7 Stockbrokers License in 1987 and 1988 and finding that making 'cold calls' to try and get people's money into an account that I could manage, was definitely NOT my cup of tea, I did not pursue that line of work. Due to the 1987 stock market 'crash' of 507 points down in one day, drumming up new clients was beyond difficult in 1988 !
That said, I did learn that when the 'big traders' at the 'institutions' buy and sell for 'the house' and 'trade against' the 'little guys', they need to 'put their trading money' somewhere after they sell, and have it available for when they buy, and that place for many of them was the US Treasury 10 Year Bond market !! as the Bond Market does several times the volume in Dollars-per-day than the Stock Market does ! and the Bond Markets have excellent 'depth' to absorb and release Dollars very quickly, excellent liquidity ! (that's the word I was looking for !) So, it's an excellent and safe place to stash cash or retrieve it when you're doing Million$$$ a day in trading, either spending Million$ or raking in Million$. And it makes Interest Income if you leave it there for a while, or even overnight, especially if Million$$ are involved, and the 'big houses' don't have the same 'commission rates' on trades, that us We The People are charged.
However, in the last couple of years, from watching the Canadian Dollar (CD$) versus the NYSE Dow 30, in the market charts on a daily basis, the thought arrived that Stock Market traders and their 'Institutions' might be using the Currency Markets to 'park' or 'retrieve' cash on a daily basis, as the Currency Markets have even better 'depth' and 'liquidity' than the Bond Market has !!!
Now from movies, "Wall Street", "Boiler Room", and even "Get a Job", the stock market traders are a wild bunch, and they also trade against each other, or trade firm against firm, and that's where the 'bigger money' is !! As the 'little guys' don't have that much money, unless you're trading against millions of little guy 'day traders' everyday !!! Do you remember those days when auto shop workers were making more money 'day trading' using the telephone ! than they'd make working at their job !! So, if you had eSignal and could trade 15 times faster in Order Entry and real time data supply, you could trade against the 'little guys' even tho you are a little guy yourself, like I was. It was all very addictive, and after a couple of years I realized I have a 'gambling problem' !!! so I stopped. Also, I wasn't making very much money either, as computers had become so powerful they knew everyone's 'entry point' and 'break even' and could trade 15 times faster than I could !!
Anyway, if this subject interests you, watch the daily NYSE Dow 30 and the CD$ charts and see if when the market traders sell stocks and buy CD$ they go up, and when they are buying stocks the CD$ goes down due to them selling CD$. This might also help to 'predict' the next short-term movement in both Indexes ! if there is some kind of 'disconnect' in the 'action' of the traders, indicating that they are 'trading against' the market so to speak, in anticipation of a coming event or news. "Buy the Rumor and sell the News", as they used to say.
What more can I say ! Best Regards and Wishes for a MultiPolar World where better leaders will exist in future times. ST
- - -
