US Treasury yield reaches 19-year high as oil prices exceed $100

The 10-year US Treasury yield reached 5.02 percent on Tuesday, its highest level since the 2007 global financial crisis, according to Al Jazeera Global News. The rise came as oil prices moved above $100 a barrel and traders anticipated a possible interest-rate increase by the US Federal Reserve.

The benchmark Treasury yield influences borrowing costs across US financial markets, including mortgages and consumer debt. Higher yields can therefore raise financing costs for households and businesses.

Al Jazeera reported that markets were focused on the risk that higher crude prices could intensify inflationary pressures and prompt higher interest rates. The European Central Bank raised rates last week, while markets expected possible increases from the Federal Reserve and Bank of Japan following policy meetings this week.

Bond yields also rose in other major economies. Germany’s 10-year yield peaked at 3.554 percent on Monday, its highest level since mid-2009, before standing at 3.547 percent on Tuesday. Japan’s 10-year yield breached 3 percent for the second time this month, reaching its highest level in three decades.

The report linked the oil-price surge to escalating attacks involving the US, Israel and Iran, as well as disruption affecting energy facilities and shipping routes. It also cited competition from corporate bonds associated with the artificial-intelligence boom and concerns over the sustainability of government debt as factors pushing yields higher.