Interest-rate swaps showed traders have priced in about a 70% chance of a Fed rate hike by April 2027. That marked a sea-change from before the Iran conflict.

Warsh won the race for Fed chair partly through sketching out a road map to rate cuts on the premise that an AI-driven productivity boom would keep inflation low.

Hawkish votes against the policy statement, which characterized the risks to the economy as balanced, led traders to price in lower chances of a rate cut at any point before 2028.

Kevin Warsh's nomination to be the next chair of the Federal Reserve passed through the Senate Banking committee in a party-line vote.

Yields across maturities rose by four to six basis points, with short-dated tenors most sensitive to Fed rate changes leading the shift.

The Federal Open Market Committee's April meeting — likely Federal Reserve Chair Jerome Powell's last — is unanimously expected to keep interest rates steady, but questions about energy, inflation and the upcoming transition in leadership still loom.

The Federal Reserve, European Central Bank and peers in Japan, the UK and Canada are all scheduled to set interest rates.

The bond selloff reflects mounting concern that prolonged disruption to energy supplies will keep inflation elevated, hindering central banks from lowering rates.

A proposed update to Basel III capital rules from federal banking regulators does not specifically include mortgage insurance as a factor in determining the risk weight for a mortgage loan held on a bank's balance sheet. Industry experts say it should.

The move followed upbeat signals on consumer spending and the labor market, with both the ADP weekly jobs report and March retail sales beating forecasts.

Wells Fargo CEO Charlie Scharf said bankers and economists are broadly against lowering interest rates now, given uncertainty from the Iran war.

The US two-year yield, which had been trading above the central bank's current ceiling of 3.75% amid the war-related surge in oil, once again dipped backed below it as crude receded.

The status quo might be jolted by individuals and companies pulling cash from banks and money markets to meet tax obligations, spurring banks to tap liquidity facilities.

Interest-rate swaps showed traders wiped out what little remained of their wagers on Fed easing after unexpectedly strong US labor market data were released Friday.

The $31 trillion US government debt market "has grown far faster than the quantum of bank capital," creating a gap between the supply and demand for liquidity.

Federal Reserve Chair Jerome Powell said the central bank is cautiously monitoring consumer sentiment as tensions from the Iran war push energy prices higher, complicating efforts to bring inflation down to the Fed's target.

Federal Reserve Gov. Stephen Miran said it is too early to judge how U.S. involvement in the war with Iran will affect inflation and monetary policy.

Early industry reaction to the Federal Reserve's Basel III proposals points to potential capital relief for banks, though stakeholders say the complexity of the changes makes their overall impact unclear.

The Fed, European Central Bank and the Bank of England all held rates this week as policymakers grapple with the uncertain outlook for inflation and growth arising from the conflict in the Middle East.

Yields in Europe and the US climbed across maturities, with those on two-year US Treasuries — especially sensitive to expectations for Fed policy — higher by 11 basis points to 3.89%.