The 10-year Treasury yield jumped above 4.9% on Thursday, its highest level since November 2023, after U.S. oil prices crossed $100 a barrel on fears of a prolonged conflict between the U.S. and Iran. The move fully erased the yield drop that followed Treasury Secretary Scott Bessent's bond buyback announcement, and investors are now turning to Friday's consumer price data and next week's Federal Reserve rate decision.
The 10-year U.S. Treasury note yield rose more than 6 basis points to 4.906% on Thursday, the highest level since November 2023. The note is the key benchmark for mortgage borrowing, auto loans and credit card debt.
Shorter-dated debt moved in tandem. The 2-year Treasury yield hit 4.501%, its highest trading level since July 2023.
The 30-year Treasury yield climbed above 5.34%, fully erasing the drop seen after Bessent's intervention earlier in the week.
Oil above $100 reignites inflation fears
Yields extended their rise on Thursday as U.S. oil prices topped $100 per barrel again, driven by fears of a prolonged Middle East conflict between the U.S. and Iran. Bond yields and prices move in opposite directions, so the move reflects a broad sell-off in Treasurys tied to inflation fears from the oil spike.
Bessent's buyback drop gets erased
The rise builds on a move that began Wednesday, when Treasury Secretary Scott Bessent said the department will buy back $6 billion of longer-dated government bonds. That announcement had briefly pulled yields lower, but Thursday's oil-driven surge fully reversed the decline.
Inflation data comes in tame, but gets overshadowed
The yield surge overshadowed a wholesale inflation reading that showed prices rose 0.4% in August, in line with Dow Jones consensus estimates. Excluding food and energy, core producer prices rose 0.2% in the month, slightly below the forecasted 0.3% increase.
With that data out of the way, investors are now looking ahead to consumer price figures due Friday for a clearer read on inflation, and to next week's Federal Reserve interest rate decision.
Sources: CNBC, Crypto Briefing
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