Treasury Yields Reach Highest Levels Since 2007

U.S. Treasury yields climbed to their highest levels since 2007 on September 23, with the benchmark 10-year yield rising above 5% as strong business activity, higher oil prices and weaker-than-expected demand at a Treasury auction intensified a selloff in government bonds. Reports placed the 10-year yield between 5.09% and 5.135%, depending on the market snapshot. The 30-year yield reached about 5.4%, while the five-year yield moved above 5% for the first time since 2007. The increases reflected investor concerns that resilient economic growth and persistent inflation could keep interest rates elevated. The reports did not establish whether yields would remain near those levels. The Treasury’s $70 billion five-year note auction added to selling pressure. The notes yielded 5.033%, above the 5.002% expected before the sale, and demand was described as weaker than expected. The result suggested investors required a higher return to buy the debt, adding to pressure on yields. Economic data released in September showed stronger business activity. S&P Global’s flash composite purchasing managers’ index rose to 58.4 from 56.0 in August.