US 10-Year Treasury Yield Ticks Higher

The yield on the US 10-year Treasury note climbed to around 4.48% on Monday as investors assessed evolving developments in US-Iran peace negotiations while awaiting a key US inflation report. Reports suggested that Washington and Tehran had agreed on a roadmap toward a final agreement within 60 days, helping ease market concerns after both sides recently exchanged fresh threats related to the conflict in Lebanon. Attention now turns to this week's US PCE price index release, the Federal Reserve’s preferred measure of inflation. Last week, the Fed left interest rates unchanged but adopted a more hawkish tone. Nine of the 19 Fed policymakers now project at least one rate increase before year-end, with markets increasingly pricing in a potential hike as early as September. Higher rate expectations continued to provide support for Treasury yields.

The yield on the US 10-year Treasury note fell to 4.44% on Thursday, partially reversing the nearly 5bps increase recorded in the previous session, as investors digested the latest FOMC decision and assessed what new Fed Chair Kevin Warsh's leadership could mean for monetary policy and inflation. The Fed left the federal funds rate unchanged, as widely expected, but signalled that further tightening may be needed this year to contain inflationary pressures. Around half of policymakers now expect at least one rate hike in 2026, while the Fed sharply raised its forecasts for both headline and core PCE inflation this year. Warsh also sought to reinforce his inflation-fighting credentials, reaffirming the central bank's commitment to restoring price stability. Markets are now fully pricing in a rate hike by October. Meanwhile, the yield on the policy-sensitive 2-year Treasury note edged up to 4.20%. US bond markets will be closed on Friday for a holiday.

The yield on the 10-year US Treasury note held around 4.46% on Thursday after rising nearly 5 basis points in the previous session, as the Federal Reserve kept interest rates unchanged but signaled growing support for rate hikes later this year. Half of FOMC members now expect at least one rate increase, with the central bank sharply raising its inflation forecasts amid the economic impact of the conflict in the Middle East. Meanwhile, Fed Chair Kevin Warsh declined to provide guidance on the next policy move but emphasized that inflation has remained above the Fed’s 2% target for several years and reiterated the central bank’s commitment to restoring price stability. On the geopolitical front, President Donald Trump signed an interim agreement to end the war with Iran and reopen the Strait of Hormuz, though it remains unclear whether Iran has already begun steps to fully reopen the key shipping route.