The yield on the 30-year U.S. Treasury bond topped 5.61% on Tuesday, reaching its highest level since 2002. The yield rose for a sixth straight day as elevated energy prices added to inflationary pressures and heavy corporate debt supply weighed on the market. The 10-year yield climbed to 5.29%.
The yield on the 20-year U.S. Treasury bond rose to 5.53% on Monday as selling pressured the U.S. bond market. The level indicated that the yield had approached those recorded in 2004.
The yield on the 30-year Treasury bond also reached approximately 5.47%. Falling bond prices pushed yields higher, while market expectations regarding the Federal Reserve's interest-rate policy came to the fore.
Yields approached 2004 levels
In 2004, the yield on the U.S. 20-year bond stood at approximately 5.59%, while the 30-year yield was around 5.58%. The latest movement came as investors sold bonds.
Brent crude reaches $107
In energy markets, Brent crude rose more than 2.5% to $107 a barrel on Monday. The increase was driven by tensions between the United States and Iran, as well as concerns that oil shipments through the Strait of Hormuz and the Bab el-Mandeb could be disrupted.
The volatility in energy and bond markets came as the potential effects of the conflicts around Iran on inflation and U.S. monetary policy were being monitored.
Seven-day plan for the Strait of Hormuz
U.S. President Donald Trump rejected on Saturday a seven-day ceasefire proposal offered by Iran through mediators. Trump described the proposal, which aimed to reopen maritime traffic in the Strait of Hormuz, as unacceptable.
Iranian Foreign Minister Abbas Araghchi said on Friday that Iran had submitted a seven-day plan to the United States through Qatar to resume vessel passages through the Strait of Hormuz. Araghchi said the decision was Washington's responsibility.
Negotiations between the two countries stalled over disagreements concerning maritime traffic in the Strait of Hormuz, which is strategically important for global energy and commercial shipments.
The yield on the 10-year Treasury also rose 4 basis points to 5.3% on Thursday, its highest level since April 2002, as investors focused on the Federal Reserve’s interest rate decision later in October.
