The Iran war has pushed the 10-year Treasury yield from below 4% before the conflict to nearly 4.75% as of last Friday, according to Moody’s Analytics Chief Economist Mark Zandi. He said long-term interest rates were approaching levels not seen since before the Global Financial Crisis, as higher energy costs fueled inflation and led investors to reassess expectations for Federal Reserve rate cuts this year. Zandi said oil must continue flowing through the Strait of Hormuz, the Federal Reserve needs to provide clearer policy guidance and lawmakers must address the United States’ worsening fiscal outlook. The conflict also raised fuel, grocery, energy and fertilizer costs. Zandi estimated that it added $21.3 billion to U.S. gasoline costs over six weeks. The IMF raised its 2026 U.S. inflation forecast to 3.2% from 2.5%, while the OECD lifted its forecast to 4.2% from 2.8%. U.S. inflation rose 0.9% in March, taking annual CPI inflation to 3.3% from 2.4% in February, with energy prices up 10.9% and gasoline prices surging 21.2%. Core inflation (price growth excluding food and energy) increased 0.2% month over month, indicating that the shock remained concentrated in energy.