US Treasury yields climb as Fed meeting nears amid geopolitical tensions

US Treasury yields are climbing as the Federal Reserve approaches its April 28-29 meeting, with Polymarket pricing a 99.8% chance of no rate cut and the federal funds rate held steady at 3.50-3.75%. Market reaction The odds for a 25 bps cut after the April meeting sit at 0.1% YES. The market for a 50+ bps cut is equally flat at 0.1% YES. Investors are wary of the ongoing US-Iran conflict, which has disrupted oil supplies and pushed up energy prices, further complicating the Fed’s rate calculus. Why it matters Geopolitical tension has raised inflation expectations, which are feeding into the bond market. The 10-year Treasury yield is hovering around 4.3-4.43%, leaving limited room for the Fed to ease.

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