The Dollar Index reached a 1.5-week high Thursday and held the level into Friday's close, supported by Middle East tensions and a stronger-than-expected April S&P manufacturing PMI that printed at the most robust pace in nearly four years. [1] The U.S. ten-year Treasury yield settled the week at 4.31 percent on April 24, per Treasury's daily par yield-curve release, after running 4.34 percent into Wednesday and 4.30 the days before. [2] The two-year sat at 3.69 percent. The curve did not steepen on the war headlines; it simply held.

The pairing is the read. A weak-dollar policy stance — the Bessent swap-line testimony, the gold-curve reset, the Tehran financial-front escalation — would normally pull both legs lower together. Instead the long end is sticky and the dollar is bid. The most parsimonious explanation is that the rules-of-engagement doctrine attached to the Iran tape, including the shoot-to-kill order, is being priced as a duration risk premium rather than a recession signal. The April FOMC meeting on April 29-30 is the next catalyst, with at least a 25 basis-point cut still in the consensus path for 2026. [3]

What the back end is saying, week-close, is that the war is now a yield-curve event, not a flight-to-Treasuries event. The energy curve already priced it. The macro tape just confirmed.

-- DARA OSEI, London