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10-Year Treasury Yield Climbs to 4-Week High of 4.58% — Inflation Expectations at 3.7% Keep Rate Hike Pressure on Warsh-Led Fed

The US 10-year Treasury yield reached a four-week high of 4.58% Thursday, while one-year inflation expectations climbed to 3.7% as declining US oil inventories and renewed Iran conflict risk reinforce fuel-price concerns. S&P 500 futures fell 0.8% in premarket trading. The Federal Reserve's June FOMC minutes, released Wednesday, revealed deep internal divisions between officials favoring a rate hike and those supporting a cut, making incoming inflation data the dominant swing factor for policy.

Federal Reserve Minutes Expected to Reveal Dovish Shift as Markets Price Two Rate Cuts in 2026

The Federal Reserve will release minutes from its January 16-17 policy meeting at 2 p.m. ET today, with investors seeking insights into policymakers' thinking after they held rates steady at 3.5%-3.75%. The document is expected to detail how officials weigh persistent inflation against signs of labor market stabilization, as markets now price in more than two quarter-point rate cuts by year-end following last week's benign CPI data.

Soft Inflation Data Adds to Rate Cut Considerations

New inflation figures showed smaller-than-expected CPI increases in January, reinforcing expectations for potential Federal Reserve rate cuts in coming months. While markets reacted modestly, rate-sensitive sectors like real estate and financials could see renewed interest if cut timing becomes clearer.