Recent inflation surprises, including April 2026 CPI and PPI readings accelerated by surging oil prices amid Middle East tensions, have driven the 10-year Treasury yield to 4.47–4.59 percent in mid-May, its highest level in nearly a year. Traders now assign elevated odds to Federal Reserve rate hikes later in 2026 under incoming Chair Kevin Warsh, who has signaled a firm stance against persistent price pressures. With the next FOMC meeting scheduled for June 16–17 and core PCE still above the 2 percent target, market-implied rate paths reflect reduced expectations for near-term easing. This dynamic limits the scope for sharp yield declines in the near term while leaving room for lower levels later if labor-market data cools or energy prices moderate before 2027.