Yields Surge to Highest Level Since January Amid Inflation Fears

US Treasury yields have been on the rise, with the 10-year yield trading near 4.79% and the two-year yield at 4.39%, marking a fifth consecutive session of selling.

The sharp increase in yields came as American forces began striking Islamic Revolutionary Guard Corps (IRGC) targets inside Iran, but surprisingly, it didn't boost the curve as one might expect.

In fact, the front end of the curve has been leading the way, with the two-year yield increasing by 1.06% against the benchmark's 0.80%, and climbing from near 3.35% at the March low to within a few basis points of 4.40%.

This unusual move is seen as a sign that investors are not necessarily buying into war risk, but rather are focused on inflation concerns, which could be addressed by the Federal Reserve at its upcoming meeting.