Treasury Yields Soar to Near 20-Year Highs Amid Inflation Fears and Rate Hike Odds

Treasury yields surged to near 20-year highs on Wednesday, with the 10-year yield reaching as high as 5.13%, its highest since 2007.

The rise in yields was driven by a combination of factors, including rising inflation data and increased odds of future Federal Reserve rate hikes.

According to S&P Global, US business activity growth accelerated for a fourth successive month in September, with firms' input costs jumping at the steepest rate for four years due to higher fuel and transport costs.

The rise in oil prices also contributed to the increase in yields, with international Brent crude oil climbing 3.8% to end the day at $103.08 per barrel.

Investors viewed the data as likely to increase the odds of multiple Federal Reserve interest rate hikes later this year and next, with market odds for a Fed rate hike in October up to more than 70%.