10-year Treasury yield tops 4.9%, highest since 2023, as oil surge raises inflation fears

Treasury yields hit multiyear highs on Thursday as traders digested U.S. oil prices crossing $100 per barrel again, overshadowing a tame inflation report.

The 10-year U.S. Treasury note yield — the key benchmark for mortgage borrowing, auto loans and credit card debt — was up more than 6 basis points at 4.906%. That's the highest level since November 2023.

The 2-year Treasury note yield, which is typically more sensitive to short-term Federal Reserve interest rate decisions, hit a high of 4.501%, its highest trading level since July 2023.

The longer-dated 30-year Treasury bond yield, which moves in line with broader geopolitical risks, was up more than 5 basis points at 5.337%.

One basis point is equal to 0.01%, and yields and prices move in opposite directions.

U.S. yields increased on Wednesday, after Treasury Secretary Scott Bessent said the department will buy back $6 billion of longer-dated government bonds. That rise continued Thursday as U.S. oil prices topped $100 per barrel on fears of a prolonged conflict in the Middle East between the U.S. and Iran.

The rise in oil prices, and the impact it may have on inflation and interest rates in the future, overshadowed a wholesale inflation reading that showed prices rose 0.4% in August. That rise was in-line with Dow Jones conesnsus estimates. Excluding food and energy, core prices rose 0.2% in the month, slightly lower than the forecasted 0.3% increase.

With the wholesale price data out of the way, and the 10-year note yield touching multiyear highs, investors will now look ahead to consumer price data that is due on Friday for clearer insights into the U.S. inflation picture and next week's Federal Reserve interest rate decision.