The US benchmark 10-year Treasury yield climbed to its highest level since 2002, driven by persistent inflation, massive government borrowing, and strong economic growth. The yield surged as much as four basis points to 5.33%, surpassing the 2007 peak as oil prices rose. The 30-year rate also reached its highest point since 2002.
This milestone marks the latest in a months-long slide for the Treasuries market. Government debt has been fluctuating globally as elevated oil prices, tied to the war in the Middle East, ripple through the economy. Investors are betting the Federal Reserve will further raise interest rates, with overnight-indexed swaps fully pricing in a rate hike by year-end.
The resilient US economy continues despite higher borrowing costs. Meanwhile, strong investment in artificial-intelligence infrastructure is adding to capital demand, pushing up borrowing costs globally.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing