The Geopolitics Are a Sideshow. The Fundamentals Are the Problem.

Our last coverage tracked the 30-year Treasury cracking 5.19% and foreign bond dumping by Japan and China. Here's the update: even after the U.S. attacks on Iran rattled markets, bond strategists are now saying the geopolitical shock isn't the real story. The elevated yield environment was already locked in.

According to Charles Schwab analyst Collin Martin in a March 11, 2026 report, the bond market volatility following the Iran attacks is real — but the underlying pressures predate the conflict entirely.

"Prior to these events, the U.S. economy appeared to be on solid footing," Martin wrote. That's the polite version. The blunt version: inflation is still running 2.5% to 3%, the Fed is paralyzed, and nobody in Washington has a plan to stop spending money we don't have.

What Happened in the Bond Market After Iran

Treasuries are supposed to be a safe haven. When geopolitical risk spikes, investors are supposed to flee INTO bonds, which pushes yields DOWN.

That is NOT what happened.

According to Schwab's Martin, 10-year Treasury yields actually rose sharply after the Iran attacks. The reason: investors aren't buying the safe-haven story right now. They're pricing in inflation risk from higher oil prices and recalibrating how long the Fed stays on hold. The bond market looked at a shooting war in the Middle East and priced in inflation concerns instead.

The Fed Is Stuck — And Knows It

Schwab's baseline coming into 2026 was one or two Fed rate cuts by year-end, with nothing happening before mid-year. That view hasn't changed post-Iran, according to Martin.

Why? Because the conflict cuts both ways. Higher oil prices push inflation up — bad for rate cuts. But a prolonged war could slow economic growth and spike unemployment — which would normally call for cuts. The Fed is caught in the middle and will stay patient. Translation: don't hold your breath for relief.

The federal funds futures market, as of Martin's March 11 report, isn't fully pricing in even a single rate cut until the September 2026 meeting. Fewer cuts are now priced in over the next year compared to what was expected at the end of February.

Bloomberg Confirms: Yields Staying High Regardless

Bloomberg's reporting — though their full article was behind a paywall — carried the headline that bond strategists warn yields will stay elevated even if the Iran conflict ends. Iran is an accelerant on a fire that was already burning.

The real fuel: sticky inflation that refuses to hit the Fed's 2% target, a federal deficit that both parties have shown ZERO interest in addressing, and now an oil price shock layered on top.

What Mainstream Media Is Getting Wrong

Left-leaning outlets are framing this as a geopolitical crisis story — as if peace in the Middle East would fix the bond market. It wouldn't. The structural problems were here before the bombs dropped.

Right-leaning outlets are using the Iran conflict to score political points without explaining why yields were already elevated — which requires discussing deficit spending under administrations of both parties.

Both framings miss the real story, which is fiscal: America has been borrowing at a pace that makes bond investors nervous, and nothing about the current political environment suggests that changes.

Private Credit Markets — The Risk Nobody's Talking About

Schwab's Martin flagged concerns about private credit markets and how stress there might spill into publicly traded bonds.

Private credit has exploded in size over the past decade. It's largely unregulated, opaque, and leveraged. If the Iran shock or sustained high yields start cracking that market, the spillover into corporate bonds and broader credit conditions could amplify everything.

Martin's advice is to not overreact — favor intermediate-term maturities and higher-rated bonds, and brace for short-term volatility. But it also assumes the private credit market doesn't seize up. That's an assumption worth watching.

What This Means for Regular People

If you have a variable-rate mortgage, a car loan, or carry a credit card balance — this directly hits your wallet. Schwab's Collin Martin says the 10-year Treasury yield will stay above 4%, supported by inflation and fiscal concerns that aren't going away.

Higher for longer isn't a temporary blip. It's the new baseline.

Politicians on both sides will point fingers at the other party. The Fed will say it's data-dependent. Wall Street analysts will issue careful hedged reports.

Meanwhile, the American borrower pays the bill.