FX.co ★ US 10-Year Yield Holds Advance

The yield on the 10-year US Treasury note hovered around 4.69% on Monday, after climbing about 5 basis points in the previous session. The move reflects concern that the Federal Reserve may be too complacent about inflation risks in the US economy, against a backdrop of ongoing tensions in the Middle East. An interim ceasefire agreement between the US and Iran is scheduled to formally expire later today, while negotiations to end the conflict and reopen the Strait of Hormuz remain stalled. Year-ahead inflation expectations, as measured by the University of Michigan, rose in August, marking a fifth consecutive month above 4%. At the same time, data released last week indicated subdued US inflation, alongside declines in consumer sentiment and retail sales. Futures markets now assign roughly a 67% probability that the Fed will keep interest rates unchanged in September, up from less than 50% a month earlier.