US Borrowing Costs Hit 5% Amid Oil Price Surge
US government borrowing costs have risen to 5% for the first time since 2023, amid an intensifying sell-off in global bond markets. The yield on 10-year US Treasury bonds hit a high of 5% on Monday, driven by soaring oil prices and escalating tensions in the Middle East.
The rise in borrowing costs is largely due to the ongoing war between the US and Iran, which has disrupted oil supplies across the region. Brent crude oil prices surged to over $108 a barrel on Monday, up 3.7% from the previous day. This increase in oil prices stokes inflation fears, as global energy markets anticipate further disruption.
Traders are awaiting key decisions from major central banks this week, including the US Federal Reserve and the Bank of England. The Fed's decision on interest rates is expected to be particularly influential, with analysts predicting a rate hike amid rising inflationary pressures.