US Treasury Yields Soar Amid Middle East War and Inflation Fears

US long-term Treasury bond yields have reached their highest level since 2007 due to concerns over inflation and the national debt amid the ongoing Middle East war. The yield on the 30-year US Treasury climbed to 5.34% before pulling back, forcing the government to refinance debt at rates not seen since before the 2008 global financial crisis.

The yield on the 10-year US Treasury note currently stands at 4.71%, up from 3.94% before the first US-Israel strikes on Iran in late February. Analysts point to rising oil prices, which have reached $90 a barrel, as a major contributor to inflation concerns.

Fiona Cincotta, analyst at Forex.com, noted that investors are increasingly worried about a prolonged inflation shock. The current jump in yields follows earlier spikes in May and late July that coincided with surging oil prices.

The Federal Reserve's decision not to raise interest rates despite elevated inflation has also contributed to the rise in yields. Saxo Markets analyst Neil Wilson attributed the move to the lack of clear guidance from the Fed since Kevin Warsh took on the role of Chair and dropped forward guidance for markets.