US Treasury yields edge up as rate hike bets weigh on markets

US Treasury yields climbed on Tuesday, as market investors weighed the decline in oil prices against expectations of the Federal Reserve continuing interest rate hikes. The two-year yield reached a fresh peak of 4.7879%, typically reflecting anticipated Fed rate changes. Last week marked the Federal Reserve's first rate hike since 2023, aimed at curbing inflation. Currently, there is a 53% likelihood of another rate increase during the central bank's October meeting, according to CME FedWatch.

Boston Fed President Susan Collins endorsed the central bank's decision to raise rates due to potential future inflation surpassing the 2% target. Oil prices tumbled but rebounded from their lowest points during the trading day. The surge in oil prices since the onset of the US-Israeli conflict with Iran has raised concerns about inflation and further interest rate hikes.

Investors also perused remarks from former President Donald Trump on the United Nations platform, expressing optimism that a deal with Iran would be reached immediately after the US midterm elections in November. The benchmark 10-year US yield slightly increased but stayed below the 5% mark, having hit a record high of 5.041% last week, the highest since 2007. This report was assisted by AI technology and edited before publication.