The ten-year U.S. Treasury yield soared to hit 5% on Monday as oil prices climbed further amid a Middle East war that has exacerbated the inflation outlook.
Near 2.30 p.m. GMT, the yield stood at 5.01%, its highest level since October 2023.
The move in the bond market came as oil prices advanced about 4% after Saudi Arabia shut its East-West pipeline – a key export route with Iran's effective closure of the Strait of Hormuz – following drone attacks by Yemen's Houthis.
The rise in oil prices, which means both major crude contracts now stand above $100 a barrel, has contributed to expectations that the Federal Reserve (Fed) will lift interest rates on Wednesday to counter inflation.
The yield on the 30-year U.S. Treasury bond is currently at its highest level in nearly 20 years.
