FX.co ★ US 10-Year Yield Holds Near 5%

The yield on the 10-year US Treasury note held just below 5% on Tuesday after rising for four consecutive sessions, as higher oil prices stoked inflation concerns ahead of a widely expected Federal Reserve interest rate increase this week. The benchmark yield is now nearing its highest level since 2007.

Oil prices resumed their climb as Saudi Arabia’s East–West pipeline remained shut, while Ukraine challenged President Trump’s assertion that it had already reached an agreement with Russia to halt attacks on energy infrastructure.

In interest-rate markets, investors are pricing in roughly a 92% chance of a 25-basis-point Fed rate hike on Wednesday, following stronger-than-expected inflation data last week. Long-term yields have also been driven higher by a surge in corporate debt issuance from AI-related companies, which has strained the capital allocation capacity of primary dealers and other financial institutions.