Brent crude retreated to $101-$105 per barrel after briefly spiking to $107.63 on September 10, pushing 10-year US Treasury yields lower by 9 basis points to the 4.93-4.95% range. The connection between oil prices and government bonds runs through inflation, as higher energy costs feed into transportation and manufacturing expenses. The 30-year Treasury yield had climbed to multi-year highs near 5.37% during the peak oil period, and a 9 basis point move represents a meaningful shift in bond markets. Easing geopolitical tensions surrounding the US-Iran conflict removed significant risk premium from crude prices, prompting bond buyers to return. Federal Reserve Chair Kevin Warsh has signaled caution, emphasizing flexibility over a predetermined course of action on rate decisions.
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