Sam Goldfarb

So for about 20 minutes after the Iran war started, bonds were a place where you could seek safety.

They rallied in a kind of traditional flight to safety move.

But ever since then, they've been basically selling off.

Yields on treasuries rise when bond prices fall.

So this sell-off has pushed yields higher.

The yield on the 10-year treasury note, which is the most closely watched one, has risen significantly.

close to 4.5% from being just a little bit under 4% right before the war started.

It was kind of this milestone that that yield had fallen below 4%.

And then just like that, the war started and they started rising.

And it's important because treasury yields kind of set a floor on interest rates across the economy.

And the 10-year treasury yield is...

very important for setting mortgage rates.

So as yields go up, mortgage rates go up.

Mortgage rates had also fallen to multi-year low right before the war.

Now they're back up to around 6.3% on average.

So, yeah, I mean, people are basically worried that the Fed might not cut rates or even raise rates because energy prices have gone up.

And often the Fed will, quote, unquote, look through energy price swings when they're looking at inflation.

But there's always concerns that

energy prices are what people pay, and that if they're rising fast, it could feed into consumer expectations for inflation.

And if everybody, investors, businesses, consumers are feeling inflation, expecting it to be high in the future, that that actually can feed into actual inflation.