US Treasury Yields Rise, Fed Rate Hike Expectations Increase Amid Mideast Developments

The U.S. Treasury term curve was notably higher for the week ending July 24, 2026, with 2-, 5-, and 10-year yields rising by 15 to 22 basis points, and the 30-year yield trading above 5% for about two weeks. Market expectations for the Fed Funds rate by the end of 2026 have increased to approximately 4.08%, pricing in about 1.8 25-basis-point rate hikes, influenced by Mideast developments and higher energy prices. Initial jobless claims dropped by 22,000 to 187,000 in the past week, marking the lowest level since 1969 and indicating a tight labor market.