FX.co ★ US 10-Year Yield Holds at 7-Week High

The yield on the 10-year US Treasury note hovered around 4.58% on Thursday, holding near a seven-week high as renewed conflict in the Middle East drove oil prices higher. The resulting inflation worries reinforced expectations of further interest rate hikes.

The US military confirmed it had carried out strikes on Iran for a second consecutive day in an effort to limit Tehran’s capacity to threaten traffic through the Strait of Hormuz. In response, Iran warned of a large-scale retaliatory operation against US military bases across the region.

At the same time, minutes from the Federal Reserve’s June meeting indicated that only a few policymakers supported an immediate rate increase, though officials voiced mounting concern about inflation. Markets continue to price in at least one additional Fed rate hike by the end of 2026.

Investors are now awaiting the latest weekly jobless claims and existing home sales figures for further signals on the interest rate outlook.