New Delhi, Sept. 2 -- The relentless rout in U.S. long-term government bonds has investors seeing red-both figuratively and literally, in their portfolios. The natural inclination is to blame inflation, but the real cause lies elsewhere.

Losses on bonds expiring in a decade or more have accelerated since the Iran war. The iShares 20+ Year Treasury Bond exchange-traded fund-a popular instrument for investing in long-duration bonds-has fallen 1.2% over the past week, bringing its total return loss to 7.1% since Feb. 27, the day before the U.S. and Israel launched attacks on Iran.

Inflation is the traditional enemy of bonds, because it makes future returns worth less, killing investor demand and, in turn, bond prices. The current inflation...