FX.co ★ US 10Y Yield Holds Advance on Inflation Worries

The yield on the 10-year US Treasury note hovered near 4.04% on Tuesday after rising 10 basis points in the previous session, as escalating tensions in the Middle East drove energy prices higher and stoked inflation concerns. The US military is expected to step up attacks on Iran, and President Donald Trump has given no signal that operations will end soon. In response, markets have pushed back expectations for the next Federal Reserve rate cut to September from earlier projections of July, although two 25 basis point cuts are still priced in for 2026. Meanwhile, data released on Monday showed that US manufacturing activity expanded for a second straight month in February. However, the ISM survey also indicated that factory input prices climbed to their highest level in nearly three and a half years, adding to inflationary pressures.