US Treasury Yields Spike to 2007 Levels Amid Inflation Concerns
US Treasury yields surged sharply on Wednesday, as inflation concerns and expectations of further interest rate hikes by the Federal Reserve intensified.
The benchmark 10-year yield climbed above 5% to its highest level since July 2007, driven by a combination of factors including surging oil prices, strong US PMI readings, and a weak Treasury auction.
Oil prices jumped sharply, with Brent crude futures for November delivery advancing about 3.9% to $103.08 a barrel, while US West Texas Intermediate crude rose 1.8% to $92.16 a barrel.
The bond sell-off pushed the 5-year Treasury yield up 15 basis points to 4.99%, while the 10-year yield jumped 14 basis points to 5.11%. The 30-year Treasury yield rose 10 basis points to 5.40%.
As yields rise, borrowing costs across the economy increase, including for mortgages and corporate debt, which can pressure equity valuations, particularly for rate-sensitive and growth stocks.