Traders work on the floor of the New York Stock Exchange (NYSE) on July 23, 2026 in New York.
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U.S. Treasury yields rose on Monday as oil prices rose, raising concerns among investors about continued inflation and government borrowing.
of 30 year treasury The yield, which is typically sensitive to geopolitical events, rose more than four basis points to 5.311%. This was the highest level since June 2007.
of 10 year treasury The yield on notes, a key benchmark for mortgages, auto loans and credit card debt, rose more than 2 basis points to 4.724%.
yield of 2 years treasury The note, which typically reacts in line with short-term Federal Reserve interest rate decisions, rose more than 1 basis point to 4.182%.
One basis point is equal to 0.01%, or one-hundredth of 1%, and yield and price are inversely proportional to each other.
Oil prices rose as the 60-day deadline for the United States and Iran to reach a peace deal expired on Monday, with Iran ruling out an extension, state media said. A senior Iranian official also told Reuters that if diplomacy with the United States fails, Iran will take an aggressive stance.
West Texas Intermediate Futures It rose 2% to trade above $84 per barrel. global benchmark brent crude oil The price rose 2% to more than $90 per barrel.
The latest benign inflation figures offer some reassurance to investors, although energy prices have soared in the wake of the Middle East conflict that erupted several months ago, raising concerns about inflationary pressures.
Barclays strategists say the rise in interest rates is due less to inflation than to the U.S. budget deficit, high levels of artificial intelligence-related issuance that competes with U.S. Treasuries, and long-term premiums, or the ultra-yields that investors are willing to hold on to.
“What is remarkable today is not that these pressures exist, but that they appear to be strong enough to overwhelm individual soft data releases,” Anshul Pradhan, head of U.S. rates research at Barclays Capital, said in a note Monday. “Three independent releases claimed yields were falling this month, but long-term rates rose anyway.”
Bond yields rose during trading on Friday after retail sales fell an unexpected 0.6% last month after July’s producer price index was flat month-on-month.
The U.S. budget deficit reached its highest monthly level in more than five years, the Treasury Department reported last week, driven by rising Medicare costs and interest on the federal debt. The federal government’s fiscal year-to-date totals exceeded the amounts for the same period last year.
“We believe investors are increasingly evaluating U.S. Treasuries through the lens of long-term fiscal sustainability, rather than the lens of inflation, monetary policy, and growth,” Anthony Saglimbene, chief market strategist at Ameriprise, said in a note Monday.
Investors are currently awaiting the release of the July Federal Open Market Committee minutes on Wednesday for further insight into the Federal Reserve’s latest monetary policy decisions and potential future interest rate trajectory.
On July 29, the Fed voted 9-3 to keep interest rates unchanged at between 3.5% and 3.75% at its fifth consecutive meeting, with the three members who voted against it (Beth Hammack of Cleveland, Neal Kashkari of Minneapolis, and Laurie Logan of Dallas) calling for a 25 basis point rate hike instead.
—CNBC’s Jeff Cox contributed.
