U.S. Treasury yields climbed sharply Monday, with the 10-year note briefly rising above 5% for the first time since 2023 as oil prices surged and diesel hit a record national average.
Markets moved as investors weighed the risk that higher fuel costs could keep inflation elevated. Brent crude traded above $109 a barrel during the day and U.S. crude nearly reached $105 before gains eased by the close. Brent ended up 1% at $105.68, while U.S. crude settled up 1.3% at $101.39.
The jump in energy prices followed the shutdown of Saudi Arabia’s East-West Pipeline, which the Saudi Energy Ministry said was halted as a precaution after attacks. At the same time, talks over the future of the Strait of Hormuz were postponed, adding to concerns about global supply routes.
Longer-term borrowing costs also rose, with the 30-year Treasury yield moving above 5.37%. Consumer rates such as mortgages often track bond yields. Markets were also looking ahead to Wednesday’s Federal Reserve decision, with rate-hike odds above 90% on Monday.
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