Recent geopolitical tensions in the Middle East, including U.S. strikes on Iran, have lifted oil prices above $90 per barrel, stoking inflation concerns and pushing the 10-year Treasury yield to intraday highs near 4.82% early in September 2026 before easing to around 4.77%. Hawkish Federal Reserve communications, including Chair Kevin Warsh’s emphasis on the 2% inflation target with no soft landing implied, have reinforced expectations of a possible 25-basis-point rate hike at the September 15-16 FOMC meeting, with markets assigning roughly 60% odds. Sticky inflation readings near 3.4% and a resilient labor market add upward pressure on yields, while elevated fiscal deficits and Treasury supply contribute to the sell-off. Key near-term catalysts include the August employment report and CPI data, which could shift rate expectations and yield trajectories.