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US Treasury yields rise to two-month highs as oil boosts inflation fears
The 10-year yield touched 4.64% and interest-rate futures priced roughly a 20% chance the Fed will lift rates next week.
US Treasuries slid, pushing 10- and 30-year yields to their highest levels in about two months, as crude oil prices surged and raised concerns about renewed inflation pressure. Yields rose by about two to four basis points across maturities, with the 10-year yield reaching 4.64%, its highest since late May.
The move was linked to higher energy costs, with RBC Capital Markets rates strategist Izaac Brook saying the rise in rates reflected continued gains in energy prices. He added that the selloff was amplified by a technical break back above key levels, including 4.20% in two-year yields and 4.60% in the 10-year.
Oil prices climbed alongside US and Iran tensions, with mediators working toward reviving a truce after strikes for a 10th consecutive day. Brent crude rose to $91 per barrel.
Interest-rate futures indicated traders saw about a 20% chance of a Fed rate increase at the policy meeting next week, while recent data also pointed to continued economic resilience, including a Philadelphia Fed services-sector survey that showed activity expanded for the first time since October 2024.
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