10-year Treasury yield climbs to 5% for the first time since 2023

The yield on the 10-year U.S. Treasury note reached five percent on Monday, marking its highest level since October 2023, according to a report from New York. This increase in yield was driven by rising oil prices and the ongoing Middle East conflict. Near 14:30 GMT, the yield was recorded at 5.01 percent, marking a notable spike.

The escalation in bond market activity was attributed to the sharp rise in oil prices, which surged by approximately four percent. This surge occurred following Saudi Arabia's closure of the East-West pipeline and Iran's effective blockage of the Strait of Hormuz due to drone attacks by Yemen's Houthis. The heightened oil prices, with both major crude contracts now trading above $100 a barrel, have increased the anticipation of the Federal Reserve raising interest rates on Wednesday to combat inflation.

Additionally, the 30-year U.S. Treasury bond yield has surged to its highest level in nearly two decades. Analysts attribute this rise to several factors, including the U.S. budget deficit and the artificial intelligence boom, which have contributed to an influx of funds in the bond market, consequently driving rates upward.