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2026-07-14 18:34:11
[US Treasury yields widen as rate hike probability jumps; 2-year yield hits 17-month high above 4.3%] ⑴ On Tuesday, the US Treasury market experienced a new round of selling pressure. The 2-year Treasury yield briefly broke through the 4.3% mark during the session, reaching its highest level since February 2025, before slightly retreating to 4.284% at the close. The 10-year yield also rose slightly to above 4.62%, with the steepening yield curve reflecting the market's repricing of the Fed's short-term policy path. ⑵ The driving factor was the surge in oil prices triggered by the escalation of the military conflict in the Strait of Hormuz. The upward risk of energy costs directly increased the market's expectation of a rate hike at the Fed's policy meeting in two weeks. This figure jumped from 27% a week ago to 41%, the most significant single-day upward revision of probability since Warsh took office as chairman. (3) The timing of the renewed US-Iran conflict coincides with Warsh's testimony before the House Financial Services Committee. This geopolitical shock may shift lawmakers' focus from independence to inflation response strategies. If Warsh hints in his testimony that he doesn't rule out raising interest rates, short-term yields could further approach the psychological threshold of 4.5%. (4) From a trading psychology perspective, previously accumulated long-term positions are being forced to exit at a loss. Meanwhile, concerns about global trade frictions triggered by Trump's tariff rhetoric, coupled with energy supply shocks, are creating a combined effect. The focus will be on whether Wednesday's CPI data strengthens expectations of an interest rate hike, and whether Warsh provides clearer quantitative guidance on the policy path during his Senate Banking Committee hearing.
