Relentless selling pressure has driven the yield on the 10-year U.S. Treasury note to a 24-year high, a stunning marker that provides further evidence that the economy has entered a new chapter of higher borrowing costs.
A key benchmark for interest rates on all types of debt, the bid yield on the 10-year note climbed to 5.304% in recent trading, pushing past its 2007 intraday peak of 5.303% to its highest level since May 2002, according to Tradeweb.
Yields, which rise when bond prices fall, have climbed with few interruptions since March when the start of the Iran conflict spurred a surge in energy prices. Though oil prices have edged lower in recent days, bond investors worry that they remain high enough to eventually feed into broader inflation measures, pushing the Federal Reserve to keep raising short-term interest rates.
Adding to the selloff has been a run of strong economic data, which suggests that the current level of borrowing costs is doing little to slow growth.
Even if oil prices fall more sharply, some analysts believe that bond yields would stay elevated, reflecting deeper pressures stemming from the global increase in government debt and historic private-sector investments in artificial-intelligence infrastructure.