FX.co ★ US 10-Year Yield Rebounds Past 4.4%

On Friday, the 10-year US Treasury note yield rose to 4.43%, as markets evaluated the adequate risk and term premiums on US debt given the fiscal uncertainties and heightened concerns surrounding tariffs and geopolitical tensions. The Trump administration has maintained its hawkish stance regarding Iran, leaving open the possibility of strikes in the coming weeks, which has contributed to the ongoing rise in crude oil prices. This situation poses a risk to recent progress in reducing inflation. Concurrently, the absence of trade agreements with the European Union and major Asian trading partners has fueled worries about the potential reintroduction of reciprocal tariffs on July 9th. Additionally, these tariffs, coupled with increased deficit spending, have led the Federal Open Market Committee (FOMC) to lower its projections for interest rate cuts over the next two years, while also adjusting inflation expectations upward and decreasing growth forecasts.