The 30-year bond's yield, which has closed above 5% every day since May 12, approached 4.98% at one point.

On Monday, Trump said talks with Tehran on an interim deal to extend the ceasefire and reopen the Strait of Hormuz were "proceeding nicely."

The shift gathered pace at the most recent policy meeting in April, when three voters on the Federal Open Market Committee voted against the decision to hold rates steady.

Warsh takes over at a tense moment for the economy and the central bank. Price pressures have reaccelerated in recent months, driven by the impact of war in the Middle East on energy supplies.

Higher energy and commodity prices are intensifying headline inflation, which means inflation is headed is not headed in the right direction.

With the war-driven price shock sending 30-year bond yields to a nearly two-decade high, Wall Street analysts say the technology is, for now, having the opposite effect on inflation.

The 30-year rate increased six basis points to 5.18% on Tuesday, a level last seen on the brink of the global financial crisis in 2007, rising alongside US government yields across maturities.

Yields dipped as much as three basis points Monday after Iran's semi-official Tasnim reported that Washington proposed a temporary waiver on Iran oil sanctions.

Three senior officials say attackers will eventually breach bank defenses, and supervisors should plan for it — while U.S. regulators stay nearly silent.

Treasury two-year yields rose four basis points to 3.93% as oil climbed after the US and Iran rejected proposals aimed at ending the conflict.

The Treasury anticipates keeping nominal note and bond sale sizes unchanged "for at least the next several quarters," the department said on Wednesday.

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.