In the midst of escalating tensions in the Middle East, concerns about inflation are growing, with fears that US Treasury bonds may suffer their longest consecutive decline in a month.

With the escalating tensions between the US and Iran causing oil prices to rise, concerns about inflation are expected to be pushed forward. US Treasury bonds are now on their longest consecutive decline in a month. Data shows that the yield on the 10-year US Treasury bond has risen for the third consecutive day, increasing by 1 basis point to 4.09%. Oil prices rose on Thursday, continuing the gains from the previous day. Insiders revealed that the US military is prepared to launch a military strike against Iran as early as this weekend, although President Trump has not made a final decision. The White House has been informed that after a significant increase in US troops in the Middle East in recent days, the military is prepared to launch an attack this weekend. Trump has privately debated the pros and cons of military action and has sought advice from advisors and allies about the best course of action - it is still unclear whether he will make a decision before the weekend. The second round of indirect talks between the US and Iran took place in Geneva, Switzerland on February 17th. Officials from both the US and Iran stated after the talks that despite remaining differences, progress had been made compared to the previous round of talks, and both sides agreed to continue engaging. While the US and Iran were engaged in indirect talks, the US continued to strengthen its military presence around Iran. The US Navy's aircraft carrier "USS Gerald R. Ford" and its escort vessels are currently crossing the Atlantic Ocean heading towards the Strait of Gibraltar. In addition, the US has dispatched a large number of fighter jets and support aircraft to the Middle East, assembling the largest air force in the region since the Iraq War in 2003. Evelyn Gutman-Leichty, a strategist at Sumitomo International, stated: "If a long-term operation led by the US aimed at regime change is launched, it could have a greater and more lasting impact on the energy market, challenging the narrative of declining inflation and prompting a reassessment of mid-term inflation risks for the yield curve." The minutes of the Federal Reserve's policy meeting on January 27-28 showed that inflation concerns have become a focus of investor attention as the central bank may need to raise interest rates if prices continue to remain stubbornly high. The minutes of the Fed meeting showed that officials have divergent views on the future direction of monetary policy. Some participants indicated that if inflation falls as expected, further lowering the target range for the federal funds rate may be appropriate. Some participants believed that rates need to be "paused for a while" while waiting for new inflation and economic data, with some suggesting that it may not be appropriate to cut rates until there is evidence that "tightening is back on track." In addition, some officials suggested that a rate hike should not be ruled out, and hoped that the post-meeting statement would more clearly reflect the "two-way possibility of rate decisions." Regarding the outlook for inflation, Fed officials expect inflation to move towards 2%, but the pace and timing of the decline remain uncertain. The impact of tariffs on core commodity prices is expected to weaken this year. Most officials warned that progress towards the 2% inflation target may be slower and more uneven than generally expected, and the risk of inflation remaining above target should not be overlooked. Some officials also suggested that persistent demand pressures could keep inflation at high levels. The money markets have reduced their bets on a Fed rate cut this week, with the probability of a third rate cut this year currently at around 25%, down from 50% last Friday. Meanwhile, the yield on the more interest rate-sensitive two-year US Treasury bond has risen to 3.47%.