US Borrowing Costs Hit 5% Amid Oil Price Surge

US government borrowing costs have risen to 5% for the first time since 2023, as soaring oil prices driven by the war in the Middle East fuel a sell-off in global bond markets.

The yield on 10-year US Treasury bonds hit 5% on Monday, with traders anticipating an increase from the Federal Reserve on Wednesday.

Brent crude oil prices surged to over $108.5 per barrel on Monday, a 3.7% increase, after Yemen's Houthi forces launched attacks against Saudi Arabia and captured the strategic island of Perim in the Bab al-Mandab strait.

The rise in oil prices is stoking inflation fears, with the global bond market facing intense selling pressure amid expectations of further interest rate hikes from central banks.