Treasury Yields Fall as Inflation Risks and Middle East Tensions Persist

The U.S. Treasury yields edged lower on Tuesday after climbing to fresh multiyear highs in the previous session, due to persistent inflation risks and geopolitical tensions in the Middle East.

The 10-year U.S. Treasury yield dropped by 1 basis point to 5.2278%, while the 2-year note yield remained flat at 4.9243%.

Investors are now pricing a more than 72% probability of a Federal Reserve rate hike at the October meeting, following this month's 25 basis point increase.

The upcoming U.S. economic data releases, including August's JOLTS report, core PCE index, quarterly GDP data, and nonfarm payrolls, are expected to influence rate and growth outlooks.