(Bloomberg) — Treasuries gained on Monday following Iran’s retaliatory attack on a US air base, adding to demand for the debt as a haven from tensions in the Middle East.

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The advances on Monday held after Qatar said it intercepted a barrage of Iranian missiles in the wake of US strikes on Iran’s nuclear sites over the weekend. Yields on 10-year Treasuries slid to their lowest levels in a month.

“For better or worse, the US is reasserting itself as a dominant force and the fact it could be a prolonged conflict favors more traditional flight-to-safety assets like US Treasuries,” George Catrambone, head of fixed income at DWS Americas. Going short the US dollar and 10-year Treasuries is a trade that “was getting long in the tooth.”

In addition, renewed expectations that the Federal Reserve could start cutting interest rates as soon as next month supported gains in the bond market. The five-year yield declined as much as 10 basis points to 3.86% and remained six basis points lower on the day.

Traders boosted their bets that the Fed will lower rates by at least 50 basis points before the end of the year, with a roughly 20% probability of a reduction in July. Markets are pricing in a September move as more likely.

Before the start of the US trading day, Treasuries had fallen alongside other global bonds and the dollar had surged as the conflict in the Middle East stoked fears of an oil-supply disruption that would fan inflation.

But oil has plunged as Iran’s retaliatory strikes were less severe than investors feared. The Bloomberg Dollar Spot Index fell 0.2%, wiping out an early advance of as much as 0.6%, after the Iranian strikes were intercepted. Patrick Locke, a FX strategist at JPMorgan, said the declines are a sign that “residual risk premium” is fading for the US currency, especially as oil prices decline.

“Markets have been on a roller-coaster ride,” Steven Zeng, a strategist at Deutsche Bank, said.

The Fed’s Path

Earlier in the US session, Treasuries got a boost from remarks by Fed Governor Michelle Bowman, who said she could support a rate cut in July if inflation remains subdued.

Her comments about the timing of the Fed’s next move echoed Christopher Waller, who on Friday said the central bank could cut next month, reiterating his view that any inflation hit from tariffs is likely to be short-lived. Bloomberg Economics puts Bowman among the Fed officials who are considered neither a dove nor a hawk, while Waller is classified as the most dovish policymaker.