18.06.202609:00:30UTC+00Bund Yields Slightly Up as Fed Signals Hawkish Shift

Germany’s 10-year Bund yield inched up to 2.93%, remaining close to its lowest level since March 17, as investors weighed a more hawkish tone from the US Federal Reserve against reports of a US-Iran agreement to reopen the Strait of Hormuz. The reported deal pushed oil prices to fresh three-month lows, easing inflation concerns. Still, geopolitical risks persisted after US President Donald Trump warned he would resume strikes and target Iranian officials if Tehran failed to uphold its commitments. As expected, the Fed left interest rates unchanged, but its latest quarterly projections showed that nine policymakers now anticipate at least one rate increase by the end of 2026. This shift came on the heels of last week’s rate hike by the European Central Bank and a similar move by the Bank of Japan earlier this week. Money markets are currently pricing in at least one additional ECB rate increase before year-end.