Yield on 10-year US Treasury note at 5% for 1st time since 2023
The Treasury Building is viewed in Washington, May 4, 2021. AP-Yonhap
NEW YORK — The yield on the 10-year U.S. Treasury note hit five percent Monday as oil prices rose further amid a Middle East war that has exacerbated the inflation outlook.
Near 1430 GMT, the yield stood at 5.01 percent, its highest level since October 2023.
The move in the bond market came as oil prices advanced about four percent 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 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.
Besides higher oil prices, analysts have pointed to the U.S. budget deficit and the artificial intelligence boom as factors that have flooded the bond market, pushing rates higher.