Recent hotter-than-expected April CPI and PPI readings, showing inflation at 3.8% and 6% year-over-year respectively amid rising energy costs, have driven the 10-year Treasury yield to its highest levels in nearly a year near 4.59%. Markets now price in a reduced likelihood of near-term Federal Reserve rate cuts and even a modest chance of hikes by late 2026, as the central bank maintains the federal funds rate at 3.50–3.75% under incoming Chair Kevin Warsh. Elevated fiscal deficits and heavy Treasury issuance continue to pressure long-term yields upward, limiting scope for significant declines despite any future easing. Key near-term catalysts include the next inflation releases and the June FOMC meeting, which will clarify whether persistent price pressures sustain yields above 4% through year-end.