Longer-term U.S. Treasury yields have been stuck in a fairly tight range for several weeks. Bouncing pretty narrowly between the 4.1% and 4.2% levels, they haven't gotten a great deal of interest as a safe haven play in the way gold has, but they also haven't sold off as stocks hover near all-time highs.

This past week, however, the 10-year yield finally had its breakout.

Within a couple of trading days, it moved sharply from around 4.15% to a high of 4.31%. That's the highest it's been since August 2025.

The clear catalyst here is geopolitics. Every time President Trump talks about acquiring Greenland, it threatens to shake up relationships with the United States' allies in NATO. In the latest round of rhetoric, Trump has threatened to increase tariffs on multiple European nations, while those countries reconsider trade relationships and dollar-denominated asset exposure.

On one side, higher tariffs generally lead to higher inflation rates. Higher inflation can lead to higher interest rates. This is part of the response we're seeing here.

On the other side, if foreign nations consider dumping some of their U.S. asset holdings, such as Treasuries, a flood of supply could hit the market that forces interest rates higher to entice buyers.

In both cases, higher interest rates are a natural response to what we've seen on the political front over the past several days.

As has been the case with tariff talk for a while, threats have usually been short-lived and de-escalated fairly quickly. As that happens, yields could drift lower. That makes U.S. Treasuries a potentially good short-term buy. Although, with the number of moving parts involved, the better bet might be to expect more bond market volatility ahead.