FX.co ★ Treasury Yields on the Rise Again

The yield on the US 10-year Treasury note edged up to 4.18% on Wednesday, its second straight daily increase and the highest level in about a month. Investors are closely watching the war involving Iran and its implications for global oil markets. Crude prices briefly eased on reports that several countries are preparing to release strategic reserves, but then resumed their ascent, reinforcing worries about a renewed, energy-driven surge in inflation. On the data front, February inflation matched expectations, with CPI remaining stable but still above the Fed’s target. The full impact of the conflict-related spike in energy prices has yet to appear in the data. The Federal Reserve is widely expected to leave the federal funds rate unchanged at next week’s meeting, and futures markets are currently pricing in only one 25-basis-point cut, likely in September.