The yield on the US 10-year Treasury note rose toward 4.59% on Monday, extending Friday’s advance to reach its highest level in nearly two months, while the two-year Treasury yield climbed to its highest point since early 2025. The moves came as the US and Iran exchanged new military strikes and uncertainty persisted over whether the Strait of Hormuz remains fully open to shipping. The resulting jump in oil prices has intensified concerns that renewed energy cost pressures could stoke inflation.
Investors are now focused on this week’s US CPI and PPI releases for fresh insight into inflation dynamics, as well as Fed Chair Warsh’s testimony before Congress for further signals on the central bank’s policy outlook. Futures markets currently imply at least one Federal Reserve interest rate increase this year, with the probability of a September hike hovering around 71%.
