10-Year Treasury Yield Hits 5.04%, Highest Since 2007, as Fed Rate Hike Bets Mount

The yield on the 10-year US Treasury note climbed to 5.041% on Tuesday, its highest level since July 2007, breaching the psychologically significant 5% threshold for the first time in nearly three years and intensifying a bruising global bond selloff. The move was driven by surging energy prices, persistent inflation, and growing trader expectations that the Federal Reserve will raise interest rates further. The 30-year Treasury bond yield also reached its highest level since June 2007, broadening the pressure across the curve.

The spike in yields raises the cost of borrowing across the economy, hitting consumers seeking mortgages and auto loans as well as corporations weighing new spending. Debt watchdogs warned the rise puts fresh pressure on the national debt trajectory. The Fed's credibility is also at stake, with markets scrutinizing whether policymakers can control inflation without triggering a sharper economic slowdown.

U.S. equities fell under the weight of rising yields, with the S&P 500 down 0.19%, the Dow Jones Industrial Average off 0.64%, and the Nasdaq 100 lower by 0.08% on the day. The move arrives during a historically volatile stretch for stocks, amplifying concerns that elevated long-end rates could persist and further compress equity valuations.