Why are Treasury yields rising, and what role is oil playing in this movement?

Treasury yields are rising due to heightened Middle East tensions that have kept oil prices near their highest levels in four years, fanning concerns over the inflation outlook; oil prices have become a principal driver of global bond yields since the US attacked Iran in late February, and elevated energy prices are leading traders to abandon forecasts for Federal Reserve interest-rate cuts this year.

How have major banks revised their Federal Reserve rate-cut forecasts in response to oil price developments?

Barclays Plc revised its Fed forecast to just one interest-rate cut by March 2027 — down from an earlier expectation of a cut in September 2026 — citing the outlook for energy prices; Morgan Stanley economists made a similar downward revision last week.

Treasuries Start Week Under Pressure as Oil Prices Resume Climb

May 4, 2026

Rising oil prices amid Middle East tensions pressured US Treasuries and fueled inflation concerns, prompting economists to revise Federal Reserve interest-rate cut forecasts downward.

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