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

The yield on the US 10-year Treasury note hovered near 4.14% on Friday, extending a four-session climb as renewed inflation concerns—driven in part by higher oil prices amid escalating Middle East tensions—supported rates.

Expectations for Federal Reserve interest rate cuts have been pushed back, with futures markets now largely pricing in the first reduction in September or October, compared with earlier forecasts centered on July.

Recent US economic data have reinforced the picture of solid momentum: jobless claims have declined, productivity has improved, announced job cuts have fallen, and the services sector has expanded at a faster-than-anticipated pace.

Meanwhile, the US-Israeli offensive against Iran has entered its seventh day with no clear sign of de-escalation. Tehran has responded with a fresh barrage of missile and drone attacks across the Gulf, and Iranian Foreign Minister Abbas Araghchi has rejected reports that Iran is seeking a ceasefire, stating that there are no plans to enter negotiations.