The yield on the 10-year US Treasury note climbed back above 4.5% on Thursday, snapping a five-day losing streak. The move followed reports of new US strikes on an Iranian military facility, which tempered hopes for a near-term peace deal and kept concerns about inflation and interest rates elevated.
Tensions also persisted between Washington and Tehran over key issues, including Iran’s determination to maintain control of the Strait of Hormuz and to preserve its nuclear program.
Meanwhile, Minneapolis Fed President Neel Kashkari reiterated on Thursday that bringing down inflation remains his foremost priority, stressing that consumer prices are still too high even though the US labor market remains relatively resilient.
Investors are now focused on the upcoming release of the PCE price index, the Federal Reserve’s preferred inflation measure, for further insight into the path of monetary policy. Futures markets currently imply roughly a 50% chance of another Fed rate hike by December.
