Indian government bonds experienced a decline on Wednesday as oil prices surged by 3%, reaching $114.36 per barrel, primarily due to reports of the U.S. extending its blockade of Iranian ports. The benchmark 6.48% 2035 bond yield settled at 6.9928%, marking an increase for the third consecutive day, with a brief rise to 7% during trading. Analysts from HDFC Bank, Sakshi Gupta and Deepthi Mathew, project that the 10-year yield may rise to a range of 7-7.50% in the latter half of the year, driven by inflation concerns, higher global yields, and foreign outflows. Additionally, the banking system liquidity averaged around ₹4 trillion ($42.14 billion) in April, as traders remained cautious ahead of New Delhi's upcoming ₹290 billion ($3.06 billion) debt sale and the U.S. Federal Reserve's policy decision, expected to hold rates steady.