A selloff in Treasuries resumed Monday as oil rallied after President Donald Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz, intensifying inflation concerns. Yields on rate-sensitive US two-year bonds rose five basis points to 4.90% while the 10-year yield climbed four basis points to 5.20%. Sovereign bonds also fell in Japan and Australia.

Brent oil gained 1.4% to $105.80 a barrel in early Asian trading as Iran said it wouldn’t soften its conditions to reopen the Strait of Hormuz, renewing pressure on the Fed to hike interest rates to rein in inflation. Trump said he expects negotiations to resume this week despite rejecting Tehran’s latest offer, Axios reported. Treasury Secretary Scott Bessent has urged Fed policymakers to keep an “open mind” on interest rates, arguing that productivity gains from artificial intelligence and deregulation will help keep US inflation in check.