10-Year Treasury Yield Hit 8-Month High

The yield on the US 10-year Treasury note rose to as high as 4.48% on Friday, its highest level since July 2025, before retreating to 4.42%. Traders remain concerned about the impact of the war with Iran on both inflation and economic growth, as prospects for de-escalation remain uncertain and oil prices continue to surge. Oil is trading close to its 2022 highs, with markets bracing for the conflict to extend into April as attacks persist across the Middle East. This comes despite US President Trump’s announcement of a 10-day pause on attacks targeting Iran’s energy infrastructure, through April 6, aimed at allowing more time for negotiations. However, some investors fear this window could also be used by the US to build up additional forces in the region. Meanwhile, traders have scaled back expectations for Fed rate cuts this year, although the central bank still sees one 25bps cut in 2026.

The yield on the US 10-year Treasury note held around 4.41% on Friday, hovering near eight-month highs, supported by heightened uncertainties over the Middle East conflict and its effects on oil prices, inflation, and economic growth. Recent reports indicate the Pentagon is considering sending up to 10,000 additional ground troops to the region, providing the White House with more leverage in negotiations. Meanwhile, President Trump extended the deadline to strike Iranian energy infrastructure by 10 days and noted that Iran had allowed 10 oil tankers to pass through the Strait of Hormuz this week as a “present” to the US. Conflict-related disruptions have pushed energy prices higher, fueling inflation fears and reinforcing hawkish expectations for Federal Reserve policy. Markets now price in nearly a 50% chance of a Fed rate hike by December, a sharp reversal from earlier expectations of two rate cuts this year.

The yield on the US 10-year Treasury note rose further to 4.39% on Thursday, hitting the highest since July, as mounting doubts over a near-term end to the war with Iran weighed on sentiment. President Donald Trump said he would not commit to a deal to end the conflict while Tehran shows little willingness to compromise. Disruptions linked to the conflict have pushed energy prices higher, reinforcing inflation concerns and strengthening expectations that the Fed will keep interest rates steady throughout the year. On the data front, initial jobless claims edged up slightly to 210K, while continuing claims fell to a near two-year low. Meanwhile, the yield on the 2-year Treasury note which is more sensitive to short-term Fed policy expectations, rose sharply by nearly 60 basis points to 3.96%.