The yield on the US 10-year Treasury note eased to around 4.65% on Friday and was on track to end the week lower as investors weighed the Federal Reserve’s cautious policy stance. The central bank left interest rates unchanged on Wednesday despite mounting inflationary pressures linked to renewed hostilities in the Middle East, though three FOMC members voted in favor of a rate increase. Chair Kevin Warsh reiterated the Fed’s commitment to taming inflation and stressed that policymakers stand ready to act if necessary, but he did not back an immediate hike and refrained from offering explicit forward guidance. Even so, markets are currently pricing in roughly a 63% probability of a 25-basis-point Fed rate increase in September. At the same time, geopolitical tensions remained high after the US military carried out additional strikes on Iranian targets in response to Tehran’s attacks on US assets across the Middle East, further dimming the prospects for any near-term diplomatic breakthrough.