The yield on the US 10-year Treasury note edged up to 4.36% on Thursday, as concerns about a renewed inflation spiral resurfaced. Oil prices surged following US President Trump’s pledge to take more aggressive action against Iran, while offering no concrete plans to reopen the Strait of Hormuz. Crude prices remain near 2022 highs, fuelling worries about their inflationary impact, which could prompt the Fed to adopt a more hawkish stance and delay any rate cuts this year. Earlier this week, Fed Chair Powell said officials may need to respond to the economic effects of the conflict, though not at this stage, adding that current policy is well positioned to allow a wait-and-see approach. Markets currently expect the Fed to keep the federal funds rate unchanged this year. Meanwhile, the bond market will be closed on Friday for the Easter holiday.
