US 10Y Bond Yield Hits 18-month High

US 10 Year Government Bond Yield increased to 4.70%, the highest since January 2025. Over the past 4 weeks, US 10 Year Note Bond Yield gained 30.70 basis points, and in the last 12 months, it increased 29.60 basis points.

The yield on the US 10-year Treasury note continued to climb to 4.71% on Thursday, rising for a fourth consecutive session to its highest level since January 2025, as surging oil prices and escalating geopolitical tensions fueled expectations that the Fed will need to raise interest rates. Markets are now pricing in a more than 33% chance of a rate hike next week, while the probability of a September increase has climbed above 78%, up from 61% a day earlier. Hostilities in the Middle East continue to intensify, with no signs of a near-term resolution. As a result, oil prices have surged nearly 31% above their pre-conflict levels seen earlier this month. Although inflationary pressures have remained relatively contained so far, the latest spike in energy prices has renewed concerns that higher oil costs could feed into broader inflation, prompting the Fed to maintain a tighter monetary policy stance.

The yield on the US 10-year Treasury note traded around 4.65% on Thursday, hitting a fresh two-month high as escalating geopolitical tensions drove oil prices higher. President Trump said the US would target Iranian infrastructure in response to every attack on Strait of Hormuz vessels, while Tehran warned of retaliation against regional energy assets. The latest impasse followed signals from both the US and Iran that renewed peace talks were unlikely in the near term, despite diplomatic efforts to revive negotiations. Elsewhere, Yemen’s Houthi rebels claimed responsibility for attacks on two Saudi tankers, heightening concerns over risks to Red Sea shipping routes. Meanwhile, markets broadly expect the Federal Reserve to leave interest rates unchanged at next week’s meeting, although uncertainty over the policy outlook has grown amid unclear signals from new Chair Kevin Warsh. Traders are now pricing in a 61% probability of a rate hike in September.