Bond Sell-Off Heats Up as Oil Prices Continue to Soar

The bond market is experiencing a sell-off as oil prices continue to rise, causing concerns about inflation and its impact on the economy.

Rising oil prices have pushed up costs for everything from gasoline to shipped goods, fueling inflation that has been squeezing households and businesses. The price of Brent crude rose 2% to $92.33, with energy costs remaining high and volatile amid the ongoing U.S. war with Iran.

The bond sell-off is global, with yields on U.S government bonds rising. The yield on the 10-year Treasury rose to 4.76%, while the yield on the 2-year Treasury increased to 4.37% from about 3.50% at the beginning of 2026.

The higher yields signal that investors are demanding a higher return from Treasurys due to increasing risk, partly driven by growing government debt. The U.S. debt surpassed $40 trillion two weeks ago, with defense costs and interest on the burgeoning deficit making up an enormous share of federal spending.