FX.co ★ US 10-Year Yield Approaches 19-Year High

The yield on the 10-year US Treasury note climbed above 4.7% on Monday, approaching the 19‑month high of 4.75% reached last week, as persistent inflation concerns and rising credit supply continued to weigh on demand for longer-dated bonds. Oil prices also advanced after President Trump indicated there was no urgency to lift the blockade on Iranian energy exports, which has been restricting tanker traffic from the Persian Gulf. Higher energy costs have contributed to stronger underlying inflation this year, even though a softer CPI reading has eased immediate fears. Nonetheless, worries that the Federal Reserve may be too complacent about inflation were evident in the sharp increase in long-term yields, a move first foreshadowed when Fed Chair Warsh suggested that raising interest rates might not be the preferred tool to counter higher prices. In addition, US debt issuance has surged as AI companies have raised $1.5 trillion in bonds this year, boosting the supply of dollar-denominated fixed-income instruments and potentially dampening relative demand for US Treasuries.