US 10-Year Treasury Yield Near 1-Month High

The yield on the US 10-year Treasury note edged up to 4.35% on Tuesday, the highest level in about a month, as ongoing uncertainty in the Middle East and rising oil prices rekindled fears of an inflationary spiral. The White House said President Trump would address Iran’s proposal to reopen the Strait of Hormuz “very soon,” although the plan avoids tackling the nuclear issue until hostilities in the Gulf subside. Meanwhile, the Fed's two-day policy meeting begins today. Policymakers are widely expected to keep the federal funds rate unchanged, with no adjustments anticipated for the remainder of the year. The ECB and the BoE are also set to announce policy decisions, with money markets pricing in potential rate hikes as early as June. In Asia, the BoJ left rates unchanged, and Governor Ueda offered little guidance on the timing of future increases.

The yield on the US 10-year Treasury note climbed to around 4.35% on Tuesday, marking a one-month high as investors positioned ahead of the upcoming Federal Reserve policy meeting. The central bank is widely expected to keep interest rates unchanged in what could be Jerome Powell’s final meeting as Fed chair. Fed nominee Kevin Warsh has emphasized policy independence in decision-making, even as markets continue to price in a more aggressive rate-cutting path ahead. Investors are also watching policy decisions from other major central banks this week, including the ECB, BOE, and BOJ. On the geopolitical front, Iran reportedly sent a new proposal to the US through Pakistani mediators, offering to reopen the Strait of Hormuz if Washington lifts its blockade, though Tehran’s nuclear program remains a key sticking point in negotiations.

The yield on the US 10-year Treasury note hovered around 4.32% on Monday, little changed but maintaining last week’s gains as stalled US–Iran peace negotiations kept markets cautious amid ongoing geopolitical tensions. President Donald Trump cancelled plans to send senior envoys to Pakistan for a second round of talks with Iran, while Tehran reiterated it would not engage in negotiations under threats or blockade conditions. Oil prices rallied again as the Middle East conflict entered its ninth week and the Strait of Hormuz remained effectively closed, fueling inflation concerns and increasing the likelihood that central banks may keep interest rates higher for longer or even tighten further. Meanwhile, the Federal Reserve is widely expected to leave its policy rate unchanged on Wednesday, a meeting that could mark Jerome Powell’s final one as chair before Kevin Warsh is anticipated to take over in May.