US Yields Rise for Third Consecutive Day Amid Inflation Concerns

U.S. Treasury Yields Climb as Crude Prices Remain Volatile

U.S. Treasury yields rose for a third consecutive session on Wednesday, driven by concerns over rising inflation and the potential path of monetary policy following the escalation of the U.S.–Iran conflict.

Key Figures:

• U.S. 10-year Treasury yield: rose 2.2 basis points to 4.079%
• U.S. 30-year Treasury yield: edged up 1.2 basis points to 4.715%
• U.S. 2-year Treasury yield: advanced 3.5 basis points to 3.535%
• ISM non-manufacturing index: increased to 56.1 in February, the highest reading since July 2022
• Private employment: rose by 63,000 jobs in February, exceeding the 50,000 forecast and the largest gain since July 2025

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Market Reaction:

The escalation of the U.S.–Iran conflict has led to volatile crude prices, with U.S. crude rising 0.27% to $74.76 a barrel and Brent falling to $81.38 per barrel. The conflict has disrupted shipping through the Strait of Hormuz, choking off vital Middle East oil and gas flows.

Impact on Interest Rates:

The rise in oil prices has dented expectations for a near-term cut by the Federal Reserve, with the June meeting now showing a 35.5% chance for a cut of at least 25 basis points, according to CME's FedWatch Tool.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Inflation Expectations:

The 10-year TIPS breakeven rate, which indicates the market's expectation for inflation, was last at 2.27%, suggesting that inflation is expected to average about 2.3% a year for the next decade. The breakeven rate on five-year U.S. Treasury Inflation-Protected Securities was last at 2.500%, its highest since February 9.