US 10-year Treasury yield tops 5% for first time since 2023 as inflation fears mount
Surging crude prices have raised concern about inflationary pressures in the countdown to the US Fed decision
The US 10-year Treasury yield breached the 5% mark for the first time since 2023, as mounting inflation concerns and soaring crude prices weighed on bond markets. The yield rose nearly 5 basis points to 5.01% on Monday, before receding slightly. This significant increase comes just days before the US Federal Reserve's upcoming decision, raising concerns about potential interest rate hikes by the central bank.
The 5% level is seen as a psychological threshold, where some investors may be poised to buy bonds in anticipation of a dip. Bond prices fell globally, causing UK and German debt to plunge as global crude prices neared US$110 per barrel. Investors are closely monitoring whether the yield will once again serve as a "line in the sand" for 10-year Treasuries, as it did in 2023.
Despite some brief setbacks, the sell-off in bond prices has remained relatively orderly, with traders betting on continued rate hikes by the Federal Reserve.
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