Yield on 10-year US Treasury note at 5% for 1st time since 2023

The yield on the 10-year U.S. Treasury note reached five percent for the first time since October 2023 on Monday, as oil prices surged due to the ongoing Middle East conflict. By 1430 GMT, the yield had climbed to 5.01 percent, the highest level since October 2023. This increase in bond market rates coincided with a four percent rise in oil prices, following Saudi Arabia's decision to shut its East-West pipeline.

The closure of the key export route, which had previously been affected by Yemen's Houthis closing the Strait of Hormuz, pushed both major crude contracts above $100 a barrel. The rising oil prices have contributed to the expectation that the Federal Reserve will raise interest rates on Wednesday to combat inflation. The 30-year U.S. Treasury bond yield is currently at its highest level in nearly two decades, with analysts attributing the higher rates to factors such as the U.S. budget deficit and the artificial intelligence boom, which have flooded the bond market and pushed rates up.