Treasury Yields Surge Past 2007 Highs as Strong Economy and Oil Prices Fuel Selloff

US Treasury yields surged on Wednesday, reaching their highest level since July 2007. The 10-year yield climbed above 5% to 5.135%, its biggest one-day move since April 7, when it rose by 16.6 basis points. This acceleration followed the key 5% level being broken.

The two-year Treasury yield, which is more sensitive to expectations for Federal Reserve policy, increased to 4.947%, its highest level since May 2024. The 30-year yield gained over 10 basis points to 5.415%, matching levels seen in mid-2007.

Stronger-than-expected economic data and higher oil prices contributed to the broad bond selloff. S&P Global reported a services purchasing managers' index of 58.7, its highest level in nearly five years, while the manufacturing PMI climbed to 56.7, its highest level in over four years.

Chris Williamson, S&P Global Market Intelligence's chief business economist, stated that US business activity is experiencing a significant growth surge across both manufacturing and services. Input costs increased at their fastest pace in four years in September, with fuel and transport costs rising alongside higher oil prices.