The yield on the US 10-year Treasury note rose for a third straight session on Thursday, climbing above 4.1% to its highest level in a week. The move followed solid US economic data and a hawkish tone from the Federal Reserve, both of which tempered expectations for multiple rate cuts this year.
At the same time, escalating tensions between the US and Iran have pushed oil prices higher, stoking concerns about renewed inflationary pressures. Minutes from the latest FOMC meeting showed policymakers remain divided on the next policy step, with some officials indicating that further rate hikes could be warranted if inflation stays stubbornly elevated.
On the data front, initial jobless claims fell more than expected to 206K last week, signaling ongoing strength in the labor market. Meanwhile, the US trade deficit for 2025 remained among the largest on record in a data series that extends back to 1960.
In response, traders modestly pared back their expectations for Fed easing this year but still anticipate two 25-basis-point rate cuts before year-end.
