US Treasury Yields Outlook: Inflation Fears and War Shakes the Bond Market

For much of 2026, the playbook in bond markets looked relatively straightforward.

Investors could collect yields of roughly 4 per cent on US Treasuries and wait for the Federal Reserve to eventually resume interest rate cuts. With inflation gradually easing and growth showing signs of moderation, many asset managers expected the bond market to benefit from a classic late-cycle environment.

Then the macro picture changed.

Escalating conflict in the Middle East, rising oil prices and weakening labour market data have introduced a complex mix of risks that is challenging one of the most widely held investment strategies of the. . .