According to a report from BNY's John Velis, U.S. Treasury bonds have not performed as anticipated during the recent geopolitical turmoil stemming from conflict in the Middle East. Velis noted that it is typical for market volatility to increase following such geopolitical shocks, with risk assets like equities and corporate bonds weakening. He also stated that, under these circumstances, the U.S. dollar usually appreciates and U.S. Treasuries rally, reflecting safe-haven behavior. In some aspects, such as the dollar's movement, price action followed the usual pattern. However, the real puzzle lies in the performance of U.S. Treasuries. Velis said, "We would have expected them to rise and yields to fall, but the opposite occurred on the first trading day after the airstrikes."