FX.co ★ US 10-Year Yield Hovers Near 2-Month High

The yield on the US 10-year Treasury note traded around 4.65% on Thursday, hovering near its highest level in more than two months as escalating geopolitical tensions drove further gains in oil prices. President Trump said the United States would strike Iranian infrastructure in response to any attack on vessels in the Strait of Hormuz, while Tehran warned it would retaliate against energy assets across the region. The latest standoff came after signals from both Washington and Tehran that renewed peace talks were unlikely in the near term, despite diplomatic efforts to restart negotiations. Elsewhere, Yemen’s Houthi rebels claimed responsibility for attacks on two Saudi tankers, intensifying concerns about risks to shipping through the Red Sea. At the same time, markets widely expect the Federal Reserve to keep interest rates unchanged at next week’s meeting, though uncertainty over the policy path has grown amid mixed signals from new Chair Kevin Warsh. Futures now imply a 61% probability of a rate hike in September.