**Elevated 5-year Treasury yields near 4.54% as of September 2 reflect persistent inflation concerns stemming from Middle East tensions and higher oil prices, which have driven a broad bond sell-off and lifted market-implied odds of a Federal Reserve rate hike at the September 15-16 FOMC meeting to around 65%.** Hawkish commentary from Chair Kevin Warsh and other officials, emphasizing the need to address sticky inflation above the 2% target, has reinforced expectations that the policy rate may rise rather than ease, limiting downside in yields. Recent data showing modest economic growth and contained but above-target core readings, alongside the upcoming September 4 employment report and September 11 CPI release, will shape near-term repricing. Traders view the current environment as one where yields could remain range-bound or test higher levels absent clear de-escalation or softer inflation prints.