30-year Treasury bond yield scales to highest level since 2002

U.S. Treasury yields rose Tuesday, adding to their rip-roaring moves to multiyear highs due to concerns around inflation and central bank monetary policy.

The 30-year Treasury bond yield, which typically reacts to geopolitical developments, was higher by 4 basis point at 5.609%. The longer-dated bond yield reached a high not seen since 2002 at 5.613%. The 10-year U.S. Treasury note yield — the key benchmark for mortgage borrowing, auto loans and credit card debt — traded 4 basis points higher at 5.285%.

The 2-year Treasury note yield, which tends to move in line with short-term Federal Reserve interest rate decisions, was little changed at 4.922%.

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

The recent spike in borrowing costs, which has seen yields move to multiyear highs, comes as the U.S. and Iran held separate talks with mediators with the aim of resolving the ongoing conflict in the Middle East, according to a report by Al Jazeera.

The seven-month war continues to weigh on energy prices, fueling investor expectations of further rate hikes from the Federal Reserve to help tackle runaway price increases, which have been exacerbated by rising government debt.

Traders are now pricing in a more than 72% chance of another Fed rate hike at its next meeting in October, according to the CME FedWatch tool. That comes after the central bank's Federal Open Market Committee earlier this month voted by 12-0 to raise its main interest rate by 25 basis points.