SynopsisU.S. 10-year Treasury yields touched their highest level since November 2023 before easing after strong auction demand. Rising oil prices and shifting Federal Reserve rate-hike expectations added to concerns over inflation and the interest-rate outlook.ETMarkets.comU.S. bond yields climb as rate-hike bets rise.Benchmark U.S. 10-year Treasury yields climbed to their highest level since November 2023 before easing after strong demand at a $39 billion auction. Rising oil prices and changing Fed rate-hike expectations also kept bond investors cautious.Strong demand at 10-year auctionThe 10-year notes were sold at a high yield of 4.834%, more than one basis point below the pre-auction trading yield. Demand reached 2.71 times the amount offered, marking the strongest bid-to-cover ratio since 2019.The strong auction demand helped pull Treasury yields back from their session highs as investors positioned ahead of Thursday's buyback.The Treasury is scheduled to buy up to $6 billion of 10- to 20-year Treasury bonds on Thursday, three times the size of its previous long-dated operation.The Treasury had already received solid demand for its $58 billion sale of three-year notes on Tuesday. The government is also scheduled to sell $22 billion of 30-year bonds on Thursday.Read more: US stocks today: US stocks retreat as oil crosses $100, yields rise ahead of inflation data10-year yield touches highest since November 2023The benchmark 10-year Treasury yield was last up 3.06 basis points at 4.835%, after reaching 4.8568% earlier in the session, its highest level since November 2023.The 30-year Treasury yield rose 2.06 basis points to 5.2846% after touching its highest level since August 18. Meanwhile, the two-year Treasury yield, which is particularly sensitive to expectations for Federal Reserve interest-rate policy, gained 2.52 basis points to 4.423%. It had earlier reached 4.4316%, its highest level since July 2024.The spread between two-year and 10-year Treasury yields stood at a positive 41 basis points, with the closely watched portion of the yield curve continuing to reflect expectations around economic growth and monetary policy.Read more: Global Market Today: Asian stocks fall as oil stokes inflation fearsOil prices add to inflation concernsThe bond-market move came as oil prices climbed above $100 a barrel for the first time since July amid an intensifying conflict in the Middle East. The surge in crude prices has raised concerns that higher energy costs could add to inflationary pressures.Investors are closely watching upcoming U.S. inflation data for clues about the Federal Reserve's interest-rate decision next week.The U.S. producer price index is due on Thursday, followed by consumer price inflation data on Friday. The readings are expected to play an important role in determining whether the Federal Reserve raises interest rates at its September 15-16 meeting.Fed rate-hike bets riseRising oil prices have renewed concerns that higher fuel and energy costs could feed into broader consumer prices at a time when inflation remains above the Federal Reserve's 2% annual target.Markets have also increased expectations for tighter monetary policy following stronger-than-expected U.S. employment data released last Friday.Federal funds futures were pricing in roughly a 60% probability of a Federal Reserve rate hike at next week's meeting.The combination of elevated Treasury yields, rising oil prices and upcoming inflation data has increased uncertainty around the Fed's policy outlook, keeping investors focused on both the bond market and incoming economic indicators.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of The Economic Times.)Read More News on(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price...moreless(You can now subscribe to our ETMarkets WhatsApp channel)Read More News on(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price...moreless