SINGAPORE, May 15 (Reuters) - U.S. Treasury yields hit their highest since June 2025 on Friday as investors bet that the Federal Reserve may need to hike rates to rein in inflationary pressures stemming from Iran war-fuelled energy shocks.

More than a month after a fragile ceasefire took effect, the U.S. and Iran are nowhere close to finding a resolution to end the war, keeping oil prices well above $100 a barrel and fanning inflation worries across the globe.

The yield on 10-year Treasury notes US10YT=RR hit 4.52% in Asian hours, its highest level since early June 2025. It was last up 5.7 basis points at 4.518%. The yield on the 30-year Treasury bond US30YT=RR touched a 10-month high of 5.061%.

The two-year US2YT=RR U.S. Treasury yield, which typically moves in step with interest rate expectations, touched 4.055%, its highest since June 2025. It was last up 5.9 bps at 4.05%.

The Iran war has left the Strait of Hormuz, which handles 20% of the world's oil and LNG flows, virtually at a standstill since the end of February, drastically shifting global rates outlook.

Brent crude futures LCOc1 were last at $106.88 a barrel on Friday, up 1%.

Investors are now pricing in just over a 33% chance that the Fed could raise rates in December, compared with a 20.7% chance a week earlier, according to the CME FedWatch tool.

That's a turnaround from earlier this year when traders expected two rate cuts in 2026.

Data this week showed U.S. inflation was accelerating due to rising energy prices, with analysts worried that even an end to the war in the near term may not bring energy prices down.

"Even if we get a deal that allows a reopening of the Strait of Hormuz soon, we suspect energy prices will remain elevated throughout 2026," said James Knightley, chief international economist at ING.

"In an environment of weak jobs and wage growth, high energy costs will continue to eat away at spending power and this runs the risk of softer retail and consumer spending growth numbers in the second half of the year."