---
title: "Treasury Yields Hit Highest Since 2002 as Iran War Adds to Inflation Pressure"
description: "A Macquarie strategist says the war lifts inflation expectations beyond oil, with spending and midterm uncertainty unsettling bonds."
author: "rews desk"
published: 2026-10-02T10:00:00Z
modified: 2026-10-03T13:45:31Z
url: https://rews.cc/a/treasury-yields-hit-highest-since-2002-as-iran-war-adds-to-i-890df6
language: en
tags: ["inflation", "war", "iran", "bonds", "economy", "business", "world"]
publisher: "Rews (https://rews.cc)"
---

# Treasury Yields Hit Highest Since 2002 as Iran War Adds to Inflation Pressure

*A Macquarie strategist says the war lifts inflation expectations beyond oil, with spending and midterm uncertainty unsettling bonds.*

By rews desk · October 2, 2026 · https://rews.cc/a/treasury-yields-hit-highest-since-2002-as-iran-war-adds-to-i-890df6

## In brief

- Yields on 10-year and 30-year Treasurys reached their highest levels since 2002 over the past month
- Macquarie’s Thierry Wizman says the Iran war is elevating inflation expectations beyond oil markets
- Trump has tied the war’s course to the Nov 3 midterms, weighing both a wind-down and renewed bombing
- Brent crude, the international benchmark, moved back above $100 a barrel on Thursday
- Pentagon figures put US war spending at at least $43.6 billion; outside estimates run higher

Yields on 10-year and 30-year Treasurys have climbed over the past month to levels last seen in 2002, passing their 2007 peaks from the run-up to the financial crisis, as the war with Iran feeds inflation pressure that runs beyond the oil market, a Macquarie strategist wrote to clients this week.

Investors have offered several explanations for the run-up, from the artificial intelligence build-out and its competition for capital to shifting foreign appetite for gold over fixed income, according to Yahoo Finance. Thierry Wizman of Macquarie argued that an underappreciated factor is not only the war’s effect on energy but the uncertainty over when, and how, it ends.

“The perception that global conflict is endemic may also be causing long-term inflation expectation\[s\] to stay elevated,” Mr. Wizman wrote in the note.

Much of that uncertainty turns on the Nov. 3 midterm elections. President Trump has said he expects the war to wrap up shortly after the vote, as he weighs the success of the U.S. naval blockade of Iran and Tehran’s shifting leverage once the elections pass, according to Yahoo Finance. But he has also said he is considering a major renewed bombing campaign afterward, a step the outlet said would likely push the conflict back into “hot war” territory.

“This status quo can change dramatically after November 3,” Mr. Wizman wrote, when Mr. Trump, “unfettered by domestic political considerations, will have more latitude to choose between peace and/or war.” In the note, he wrote that “implied volatilities are starting to price in divergent two-way outcomes after November 3, when events can shift wildly one way or the other.”

The spending question sits at the center of the market’s inflation math. The closure of the Strait of Hormuz and attacks on energy infrastructure across the Gulf have sent energy prices climbing, depressing bond prices as investors price in higher inflation for longer; Brent crude, the international benchmark, pushed back above $100 a barrel on Thursday.

Wars are also expensive to fight, with the government writing checks for munitions restocks, fuel for aircraft and naval vessels and combat pay. The Pentagon’s latest figures to Congress put U.S. spending on the conflict at at least $43.6 billion so far, though outside research institutions suggest the actual sum could be far higher.