US 10Y Yield Climbs on Renewed US-Iran Tensions
The yield on the 10-year US Treasury note rose above 4.5% on Thursday, snapping a five-session decline as reports of fresh US strikes on an Iranian military facility dampened hopes for a near-term peace agreement and kept inflation and interest rate concerns elevated. Washington and Tehran also remained divided over major issues, including Iran’s insistence on retaining control of the Strait of Hormuz and preserving its nuclear program. Meanwhile, Minneapolis Fed President Neel Kashkari said on Thursday that reducing inflation remains his top priority, emphasizing that consumer prices are still too high even as the US labor market remains relatively strong. Investors are now awaiting the latest PCE price index report, the Federal Reserve’s preferred inflation gauge, for additional clues on the direction of monetary policy. Markets are currently pricing in roughly a 50% probability of a Fed rate hike by December.
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