The 10-year US Treasury yield rose toward 4.2%, its highest level since early September, as traders grew increasingly concerned about the Federal Reserve’s policy trajectory heading into 2026. While a rate cut on Wednesday is already priced in, persistently high inflation has strengthened expectations that policymakers will move cautiously. The 30-year yield also climbed to a three-month high of 4.8%. Meanwhile, data released last week showing a modest improvement in US consumer confidence added to the uncertainty, contrasting with labor market reports that point to a marked slowdown in hiring. Political developments also weigh on market sentiment. While President Trump is expected to nominate a Fed Chair aligned with his dovish policy stance, market participants are wary that a new Chair could overextend rate cuts to accommodate political pressures.