NEW YORK — The yield on the 10-year U.S. Treasury note climbed above 5% in intraday trading, a level widely viewed as a psychological resistance point, as a selloff in U.S. government debt continued.
The 10-year yield, a global benchmark for interest rates, rose as high as 5.014% on the 14th, up 0.029 percentage point from the previous session. Bond yields and prices move in opposite directions, so rising yields mean falling prices. The two-year yield, which is sensitive to monetary policy, climbed to 4.679%, while the 30-year yield, a reference for mortgage rates, reached 5.386%. Yields later retreated as some bargain hunting emerged.
It was the first time the 10-year yield had crossed 5% during a session since October 2023, and only the second time since 2007, just before the global financial crisis. Bloomberg reported that in 2023 the 10-year yield closed above 5% on only one day.
The rise in Treasury yields came as a prolonged war in Iran sent oil prices sharply higher, reviving inflation concerns. After Saudi Arabia shut down its East-West Pipeline, which had served as a key route for crude shipments bypassing the Strait of Hormuz, November Brent crude futures, the global benchmark, rose to about $108 a barrel. Price indexes running well above the Federal Reserve's 2% target, the U.S. federal government's large budget deficit and heavy corporate bond issuance tied to artificial intelligence infrastructure added further upward pressure on yields.
According to CME Group's FedWatch tool, the federal funds futures market raised the probability that the Fed will lift its benchmark rate by 0.25 percentage point at its Sept. 15-16 meeting of the Federal Open Market Committee to 92.3%, from 87.3% a day earlier.
