The yield on the US 10-year Treasury note strengthened above 5.2% on Tuesday, approaching its highest levels since 2002 as markets anticipated further Federal Reserve tightening to combat energy-driven inflation linked to persistent US-Iran uncertainty. Markets are currently pricing in roughly a 70% probability of a Fed rate increase in October. Oil prices extended their gains after Iranian officials reportedly cast doubt on the prospects of reaching an agreement before the US midterm elections in November, following President Trump’s rejection of Tehran’s latest proposal. Meanwhile, investors are preparing for a busy week of key economic releases, including the PCE inflation report and monthly jobs data, which are expected to offer further insight into the health of the US economy and shape Fed expectations. Strong economic data, worsening fiscal conditions, and rising US government debt have also put pressure on the Treasury market in recent weeks.