Short-term US Treasury yields have risen to the highest level since early 2025, and the tense situation in Iran has once again boosted oil prices, causing the market to speculate that the Federal Reserve may need to raise interest rates to fight inflation. Interest rate sensitive 2-year US Treasury yields once rose 4 basis points to 4.25%, the highest since February 2025; 5-year yields also hit a similar high of 4.35%. The benchmark 10-year US Treasury yield rose 3 basis points to 4.60%, the highest since May. Brent crude rose 5% after a new round of mutual attacks between the US and Iran. The two sides gave conflicting statements about whether the Strait of Hormuz is still open. The decline in the bond market widened after US President Donald Trump said the US was “resuming” the blockade of Iranian ships.

Short-term US Treasury yields have risen to the highest level since early 2025, and the tense situation in Iran has once again boosted oil prices, causing the market to speculate that the Federal Reserve may need to raise interest rates to fight inflation. Interest rate sensitive 2-year US Treasury yields once rose 4 basis points to 4.25%, the highest since February 2025; 5-year yields also hit a similar high of 4.35%. The benchmark 10-year US Treasury yield rose 3 basis points to 4.60%, the highest since May. Brent crude rose 5% after a new round of mutual attacks between the US and Iran. The two sides gave conflicting statements about whether the Strait of Hormuz is still open. The decline in the bond market widened after US President Donald Trump said the US was “resuming” the blockade of Iranian ships.