The US 10-year Treasury yield briefly surpassed 5% for the first time since October 2023 on Monday, as mounting inflation concerns collided with swelling government and corporate borrowing needs. The yield rose nearly 5 basis points to as high as 5.01% before easing back to around 4.94% by midafternoon in New York. The jump followed surging crude prices, with Brent crude approaching $110 a barrel, raising concerns about persistent inflationary pressures ahead of this week's Federal Reserve decision.

Bond prices fell globally, with UK and German debt sliding alongside Treasuries. Investors are watching whether 5% will again prove a psychological ceiling for 10-year yields, as it did three years ago. "The 5% mark in 10-year rates is clearly a key psychological level for investors," said Molly Brooks, US rates strategist at TD Securities. The rising yield threatens to slow economic growth and weigh on equities, prompting Treasury Secretary Scott Bessent to advocate for bond buybacks and reduced long-maturity debt issuance.

The selloff reflects deeper structural forces, with global government borrowing costs rising to 2007 levels. As the Treasury market balloons to roughly $32 trillion and federal debt exceeds 100% of GDP, Fitch Ratings warned in August that the US remains vulnerable to future economic shocks. With less than two months before the midterm elections, the 10-year yield sits about a full percentage point above pre-Iran conflict levels.