US 10Y Yield Rises on Fresh US-Iran Strikes

The yield on the US 10-year Treasury note climbed to around 4.59% on Monday, hovering near seven-week highs as renewed missile strikes between the US and Iran drove oil prices higher, reinforcing expectations of interest-rate hikes to contain inflation. The US carried out its fourth strike in a week against Iran on Sunday in retaliation for an Iranian attack on a Cyprus-flagged container ship. Investors are also awaiting key US inflation data this week for further clues on the Federal Reserve’s policy outlook. Markets currently expect the Fed to deliver one more interest-rate hike before the end of the year. Minutes from the Fed’s June meeting, released last week, showed that a few policymakers saw a case for raising rates, though they ultimately supported keeping policy unchanged. Meanwhile, Fed Chair Kevin Warsh is scheduled to make his first appearance before the US Congress on Tuesday and Wednesday.

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