Treasury yields moved higher after the United States threatened Iran with increased economic sanctions, a step that underscores the tense standoff between Washington and Tehran. Sanctions have been a central U.S. tool against Iran’s oil, financial and shipping sectors, and the source says they have been repeatedly expanded throughout 2026. The rise in yields suggests investors are pricing in greater geopolitical risk, including the possibility that energy prices stay elevated and keep inflation expectations firm. Market participants also appear to view the latest threat as consistent with a lower chance of a final U.S.-Iran nuclear deal before the August 13, 2026 deadline, a shift reflected in prediction markets (platforms where traders bet on outcomes).