Yields on longer-dated U.S. Treasury securities pushed to their strongest levels in over a year during overnight trading on Monday, then pulled back slightly as markets digested renewed inflation risks tied to the ongoing Iran conflict.
The benchmark 10-year Treasury note climbed to 4.631% in overnight trading, its highest reading since February 2025. The yield later retreated and was last reported down modestly at 4.585%.
The 30-year Treasury bond followed a similar intraday trajectory, trading at the highest levels seen in more than a year before easing. It was last down a little more than 2 basis points at 5.125%.
Market participants pointed to intensifying inflation concerns after crude oil prices pushed above $111 per barrel last week. Those gains in oil coincided with limited progress in negotiations surrounding the Iran war and a series of ship attacks and seizures in and around the Strait of Hormuz, a key artery for global oil shipments.
The sudden move in fixed income came after crude topped the $111 mark and a public warning from President Donald Trump on Truth Social telling Iran to "better get moving" on the latest U.S. peace proposal. The combination of higher oil prices and elevated geopolitical risk helped drive a sharp sell-off in global bond markets on Monday.
Investors grappled with the inflation implications of a higher oil price environment and the potential for further supply disruption in a critical shipping corridor. That concern was reflected in both the 10-year and 30-year yields reaching their peak readings for the first time in more than a year before modestly easing.
Overall, the trading session highlighted how developments in energy markets and geopolitics can quickly feed into fixed-income repricing when inflation expectations shift. For now, yields remain elevated relative to recent levels following the overnight bout of selling pressure.