FX.co ★ Treasury Yields Little Changed After Spike

The yield on the US 10-year Treasury note was little changed at 4.58% on Thursday, after rising about 10 basis points over the previous two sessions to its highest level in roughly two months. Heightened tensions in the Middle East, as the US and Iran exchanged strikes, drove a sharp increase in oil prices. Those developments intensified worries about a renewed flare-up in inflation, bolstering expectations that the Federal Reserve may keep interest rates higher for longer.

On the data front, the latest jobless claims report continued to signal a resilient labor market. Meanwhile, minutes from the Fed’s June FOMC meeting showed that only a few policymakers favored a rate hike, though officials voiced increasing concern over persistent inflationary pressures. Markets are still pricing in at least one Fed rate cut by the end of 2026, while the probability of a move at the September meeting currently stands at around 64%.