Rates: Lessons From The Iraq War

2026-03-06 05:40:00 ET

By Padhraic Garvey, CFA , Regional Head of Research, Americas

Can we identify echos from the 2003 Iraq war for Treasuries and rates?

In 2003, in the weeks leading up to the war in Iraq, the US 10yr Treasury yield fell from 3.95% to 3.55%, a 40bp drop over a three-to-four-week period. Not all of this was reflective of the upcoming war, but a lot of it was. There was an overt build-up of military presence as the coalition of the willing got ready. Hostilities finally kicked off on 20 March 2003, by which time the 10yr yield had popped back up to the 4.1% area. And in the first couple of weeks of the attack on Iran, the 10yr yield fell back down to the 3.8% area. The dominant impact impulse, over consecutive weeks, was in the direction of lower yields (a flight into Treasuries)....

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