The 10-year Treasury yield rose above 5 per cent on Monday for the first time in 16 years, extending a multi-week rout in bonds as investors bet that the US Federal Reserve would keep interest rates at their current high levels for longer.
The 10-year yield, which is the benchmark for asset prices across the globe, rose 0.078 percentage points to 5 per cent, its highest level since July 2007, extending a steady repricing of government debt that has been fuelled by better than expected economic data and an increase in government bond supply.
Yields on longer-dated Treasury bonds have moved higher since the Fed indicated in the so-called dot plot from its September meeting that officials were expecting a slower path towards interest rate cuts in 2024 and 2025. Strong US economic data since then has only hardened investor expectations that the Fed is likely to keep rates higher for longer.