Global Bond Selloff Pushes US Treasury Yields Near 5%

The global bond selloff has pushed U.S. 10-year Treasury yields near the closely watched 5% level as inflationary fears stemming from oil prices surging well beyond $100 a barrel and rising chances of a near-term U.S. rate hike rattle investors.

With borrowing costs from Tokyo and Sydney to New York and London at multi-decade highs, investors are pricing in the need for interest rate increases to tackle price pressures due to the more than six-month long war in the Middle East.

The European Central Bank raised rates on Thursday and warned price pressures could prove lasting, while data showing U.S. producer prices increased in August stoked wagers of an imminent rate hike when the Federal Reserve meets next week.