The yield on the US 10-year Treasury note remained elevated above 4.4% on Tuesday, nearing the highs reached in March, as tensions in the Middle East showed little sign of easing and rising oil prices continued to fuel inflationary pressures. Headline inflation accelerated to 3.8% in March, the highest level since March 2023 and above market expectations of 3.7%, driven largely by higher gasoline prices. Core inflation also surprised to the upside, rising to 2.8%. US President Donald Trump said the ongoing ceasefire was “on life support” after Tehran delivered what he described as an “unacceptable” response to Washington’s proposal to end the conflict. Against this backdrop, the Fed is widely expected to keep interest rates on hold throughout the year, while markets currently price in a roughly 27% probability of a 25bps rate hike in December.