US Treasury Yield Stabilizes Amid Ongoing Global Tensions

The yield on the US 10-Year Treasury note has stabilized around 4.69% after rising about 5 basis points in the previous session, reflecting concerns that the Federal Reserve may be underestimating inflationary risks in the US economy amid ongoing tensions in the Middle East.

The interim ceasefire agreement between the US and Iran is set to formally expire today, with negotiations to end the conflict and reopen the Strait of Hormuz stalled. This has led to increased uncertainty and market volatility.

Recent data showed subdued US inflation, while consumer sentiment and retail sales declined. However, year-ahead inflation expectations compiled by the University of Michigan rose in August for a fifth consecutive month above the 4% level.