US Treasury yields fell on Friday as concerns over the conflict in Iran boosted demand for safe haven bonds and after Federal Reserve Governor Christopher Waller said the US central bank should consider cutting rates at its next meeting.
Demand for Treasuries ebbed earlier in the session on optimism that the US would find a diplomatic solution to the Israel-Iran conflict. The White House said on Thursday that President Donald Trump will decide on potential US involvement in the next two weeks.
But that sentiment soon faded and markets turned more risk averse. Iran said on Friday it would not discuss the future of its nuclear program while under attack by Israel.
US markets are catching up after being closed on Thursday for the federal Juneteenth holiday.
Fed funds futures traders, meanwhile, raised bets that the US central bank will cut rates by 50 basis points this year following comments by Waller. They are now pricing in 51 basis points of cuts by December, up from 46 basis points earlier on Friday
