Benchmark 10-year ​U.S. Treasury yields climbed above ​5% on Monday, the highest level since October 2023 and ‌a ⁠closely ⁠watched psychological threshold that analysts ​say could ripple through the U.S. ​economy and threaten the bull market in stocks ​by denting ⁠the relative appeal ‌of U.S. ​equities.Yields have surged as ⁠traders price in the possibility that the Federal Reserve will need to keep interest rates higher for longer, after a jump in oil prices ‌revived fears of renewed inflation pressure. Price pressures have already been ⁠running well above the central bank's 2% annual target.The yield ​on the 10-year notes was last up 2.89 basis points at 5.004%.U.S. consumer ‌prices accelerated in ⁠August, data ⁠on Friday showed, boosting bets that the Fed will hike rates to stem inflation that is already running well above ​its 2% annual target.That was "probably the nail in the coffin," said Tom di Galoma, managing director at Mischler ​Financial.For live updates on US Markets, click hereSurging oil prices have added to concerns that inflation will keep worsening as the war with Iran drags on. Oil prices jumped more than 3% on Monday, after new strikes on Saudi Arabian ​energy infrastructure and attacks on ships in the Middle East ⁠compounded supply ‌concerns.A strong jobs picture, with employers adding 162,000 jobs last month, also ​reinforced the view.Fed ​funds futures traders are now pricing in 89% odds of a hike ⁠at the conclusion of the Fed's two-day meeting on Wednesday.Traders will ​also focus on updated interest rate projections in the Fed's "dot plot," which ​may show that some policymakers anticipate an additional rate hike this year. The last quarterly projections at the Fed's June meeting showed nine Fed officials expected a rate hike by year-end.The 2-year note yield, which typically moves in step with Fed interest rate expectations, rose 0.54 basis points to 4.649%.Rising interest ‌rate expectations, heavy corporate and government debt supply, a strong growth outlook and concerns about the long-term U.S. fiscal trajectory have combined to send yields higher in ​the past month."The ​budget and the deficit ⁠and the overall makeup of our debt continues to grow," said di Galoma.The 5% level for 10-year notes will be seen as a key test on whether economic and equity market strength ​are able to sustain the higher rates. The 10-year yields underpin mortgages and other loans and housing activity has remained subdued amid higher rates even as other sectors of the economy such as the tech sector grow.Demand for longer-dated debt will also be tested when the Treasury sells $13 billion in 20-year bonds on Tuesday. The U.S. government will also sell $19 billion in 10-year Treasury Inflation-Protected Securities on Thursday.