FX.co ★ US 10-Year Yield Hits 1-Year High

The yield on the US 10-year Treasury note rose above 4.5% on Friday, its highest level in a year, as mounting inflationary pressures linked to the Iran war reinforced expectations of a Federal Reserve rate hike later this year. Earlier in the week, data showed that US wholesale inflation in April accelerated at its fastest pace since 2022, while consumer prices posted their largest increase since 2023 amid renewed cost pressures stemming from the energy shock triggered by the conflict. Retail sales growth slowed in line with forecasts but continued to signal resilient consumer spending. Markets have now fully priced out the possibility of a Fed rate cut this year, and an increasing number of traders are positioning for a potential rate hike by December. At the same time, investors kept a close eye on the second day of high-level talks between President Donald Trump and Chinese President Xi Jinping.