Several Federal Reserve officials, including Dallas Fed President Lorie Logan, Cleveland Fed President Beth Hammack, and Minneapolis Fed President Neel Kashkari, publicly advocated for further interest rate hikes on Friday to combat inflation, citing a strong labor market and upside risks to price pressures. This hawkish stance pushed longer-dated Treasury yields to multi-year highs, with the benchmark US 10-year note yield rising 6.35 basis points to 4.727% (highest since January 2025) and the 30-year bond yield climbing 5.14 basis points to 5.2584% (highest since mid-2007). Traders are now pricing in a 69% probability of a Fed rate increase at the September meeting.

Meanwhile, the Bank of Japan (BOJ) kept interest rates unchanged on Friday, but Governor Kazuo Ueda signaled the central bank's resolve to push up borrowing costs, noting that inflation risks are skewed to the upside and t