The yield on the US 10-year Treasury note rose to around 4.4% on Monday, reaching eight-month highs as surging oil prices from the Iran war fueled inflation concerns and reduced expectations for Federal Reserve rate cuts this year. The US-Israel war with Iran entered its fourth week with no sign of easing, with President Donald Trump threatening strikes on Iranian power plants if the Strait of Hormuz is not reopened, while Tehran warned it would target key US and Israeli assets across the region if its energy facilities were hit. Markets dialed back expectations for additional Fed rate cuts, while some traders priced in a potential rate hike toward year-end. Last week, the central bank held its policy rate steady as expected, with Chair Jerome Powell noting it was too early to gauge the full economic impact of the Iran conflict. The ECB, BOE and BOJ also kept rates unchanged but signaled readiness to tighten policy further if inflationary pressures persist.
