Treasuries Rally as U.S.-Iran Tensions Escalate, Boosting Safe-Haven Demand

U.S. Treasury prices rose sharply on January 29, 2026, as escalating geopolitical tensions between the United States and Iran drove investors into safe-haven assets, pressuring yields lower across the curve. The 10-year Treasury yield fell 12 basis points to 3.85%, while the 2-year yield dropped 8 bps to 4.12%. Bond demand surged during New York trading hours after reports of heightened military posturing in the Persian Gulf. “Risk-off sentiment is dominating markets,” said Priya Mehta, chief rates strategist at Horizon Capital. “Treasuries are benefiting from a classic flight-to-safety bid.” This marks the largest single-day rally in Treasuries since October 2025. Gold and the Japanese yen also gained, while equity futures declined. Investors are now closely monitoring diplomatic developments and potential oil supply disruptions.