The yield on the 10-year US Treasury note held around 4.04% on Tuesday after climbing 10 basis points in the previous session, as the escalating Middle East conflict pushed energy prices higher and fueled inflation concerns. The US military is expected to intensify attacks on Iran, with President Donald Trump giving no indication that operations would end soon. Markets have pushed back expectations for the next Federal Reserve rate cut to September from earlier forecasts of July, though two 25 basis point reductions remain priced in for 2026. Meanwhile, data on Monday showed US manufacturing activity expanded for the second consecutive month in February. However, the ISM survey reported that factory input prices rose to the highest level in nearly three and a half years, further intensifying inflation worries.
