US 10Y Bond Yield Hits 42-week High

US 10 Year Government Bond Yield increased to 4.49%, the highest since July 2025. Over the past 4 weeks, US 10 Year Note Bond Yield gained 23.90 basis points, and in the last 12 months, it decreased 4.50 basis points.

The yield on the US 10-Year Treasury note climbed to 4.48% on Wednesday, its highest level since July 2025, amid growing signs that the conflict involving Iran is adding to inflationary pressures. Producer prices rose 1.4% month-on-month, marking the sharpest increase since 2022, largely driven by higher energy costs. A day earlier, data showed that both headline and core consumer inflation accelerated more than expected, reinforcing concerns that price pressures are becoming more persistent. Meanwhile, tensions between the US and Iran continue with little indication of a near-term resolution, raising expectations that elevated oil prices could persist. As a result, investors increasingly expect the Federal Reserve to keep interest rates unchanged for the remainder of the year, with the odds for a 25bps rate hike in December standing above 30%.

The yield on the US 10-year Treasury note firmed around 4.46% on Wednesday, approaching its highest level since June last year as stronger-than-expected US inflation data reduced expectations for Federal Reserve interest rate cuts. US consumer inflation rose 3.8% in April, above forecasts of 3.7% and the highest since May 2023, as surging energy prices linked to the Middle East conflict added to price pressures. Markets have largely priced out any chance of Fed rate cuts this year, while expectations for a quarter-point rate hike in December have climbed to 35%. Investors are now awaiting the latest producer inflation data for further signals on how the Iran war is affecting the US economy. Meanwhile, oil prices remained elevated as diplomatic efforts to resolve the US-Iran conflict stalled, keeping inflation risks in focus.