Short-term US Treasury yields have reached their highest level in 17 months. Against a backdrop of rising oil prices driven by renewed US-Iran tensions, the outlook for US rate hikes is drawing fresh attention ahead of inflation data releases. The 2-year yield rose 2 basis points to 4.283%, its highest since February 2025. The 10-year yield also hit a two-month high, recently standing at 4.619%. According to the CME FedWatch tool, traders have fully priced in a rate hike by September, with the probability of a July hike climbing to 43.3% from 25.7% a week ago.