Oil Price Volatility Drives U.S. Government Bond Interest Rates to Soar

Interest rates on U.S. government bonds are surging due to inflationary pressure caused by volatility in international oil prices.

The market is betting on a potential Federal Reserve interest rate hike in December rather than October, with inflation-sensitive U.S. 30-year Treasury yields reaching 5.612 percent, the highest level since June 2002.

The 10-year interest rate benchmark hit 5.265 percent, its highest level since 2007, despite a recent decline in oil prices.

U.S. President Donald Trump predicted that oil prices will soon fall, but this has not yet had an impact on interest rates.