The yield on the 10-year US Treasury note stood at 4.65%, extending its pullback from the previous session after US inflation came in line with expectations. Both headline and core inflation eased as forecast in July, easing some of the pressure on the FOMC to raise interest rates next month.
Earlier this year, underlying consumer prices had risen sharply after the outbreak of war in Iran pushed energy costs higher and disrupted key supply chains. In response, several FOMC members issued hawkish dissents at the Fed’s most recent decision to hold rates steady, and more policymakers have since signaled a more hawkish stance in public remarks.
Even so, elevated energy prices continued to feed through to price indices as President Trump hardened his position on Iran, prompting Tehran to rule out any imminent suspension of blockades that are constraining trade. Concerns that the Fed might refrain from raising rates to counter inflation had already driven long-term yields sharply higher earlier in the month.
