US Treasury Yield Hits 5% as Fed Hike and Middle East Tensions Fuel Inflation Fears
The US Treasury yield has been pushed to its highest level in over 15 years after the Federal Reserve's interest rate hike. The benchmark 10-year US Treasury yield reversed an earlier decline and reached 5% on Thursday, its highest since 2007.
According to Reuters, Iran has vowed to continue fighting 'until the last drop of blood' after threatening the US that peace talks will not resume until all conditions are met. This prolonged conflict in the Middle East has fueled concerns about higher energy prices and inflation, putting upward pressure on Treasury yields.
The Federal Reserve raised its benchmark interest rate by a quarter-percentage point at its September meeting, marking its first rate hike since July 2023. Fed Chairman Kevin Warsh delivered hawkish signals, warning of persistent inflation risks and signaling further increases in borrowing costs in coming months.