10-year Treasury yield jumps to highest level in over a year as oil surge rattles bond market | CNN Business

New York —

Rising oil prices and persistent inflation nerves are rippling through bond markets and pushing up borrowing costs for US consumers.

The 10-year US Treasury yield on Thursday rose four basis points, to 4.71%, its highest level since January 2025. The yield rose just above its previous Iran war peak in May of 4.66%. Prior to the war with Iran, which started in February, the 10-year yield was below 4%.

Renewed tensions between Washington and Tehran and climbing oil prices, with Brent crude hitting $100 per barrel Thursday morning, are reigniting jitters in the bond market. Investors are demanding a higher yield on Treasuries to compensate for the risk of inflation eating into their return. Yields rise when bond prices fall.

The war with Iran and surge in oil prices has shifted the outlook for central banks across the globe. Traders expect the Federal Reserve to keep rates on hold, or even hike them, in the coming months. The prospect of higher borrowing costs is keeping bond yields elevated. And the bond market is also adjusting to the start of Kevin Warsh’s term as Fed chairman.