Bond yields are falling even as oil tops $102, showing that Wall Street fears recession more than inflation

Bond yields are coming back down as President Donald Trump’s war on Iran looks to keep oil prices higher for longer, flipping the outlook from high inflation to a recession.

Before the war, yields eased on expectations for Federal Reserve rate cuts as inflation cooled. Then the war drove up bond yields, after soaring crude rattled the outlook for inflation and the Fed. Now rate cuts are looking possible again.

With the Strait of Hormuz still firmly in Iran’s control, making...