U.S. Treasury yields declined as investors flocked to the safety of government bonds, spurred by worries over the Delta variant and its potential to derail the global economic rebound. The yield on the benchmark 10-year Treasury note fell to 1.2%, while the 30-year bond yield also decreased.

The resurgence of COVID-19 cases in various parts of the world has prompted investors to reassess the growth outlook, leading to increased demand for safer assets like U.S. Treasuries. This flight to safety has put downward pressure on yields, reflecting a more cautious stance among market participants.

Several factors contributed to the risk-off sentiment:

• Concerns about the Delta variant’s transmissibility and potential impact on economic activity.
• Uncertainty surrounding the Federal Reserve’s future monetary policy decisions.
• Geopolitical tensions adding to the overall sense of unease.

Analysts suggest that the Treasury market will likely remain sensitive to developments related to the pandemic and economic data releases. Investors will closely monitor infection rates, vaccine efficacy, and any potential changes in government policies aimed at containing the virus.