Bond selloff deepens as oil surge fuels 6% yield forecasts

US Treasury and global bond yields surged Monday as oil prices spiked over 3% to $108.27 per barrel following President Donald Trump's rejection of Iran's proposal to reopen the Strait of Hormuz, pushing the 10-year Treasury yield to 5.23% and fueling concerns about prolonged inflation and higher interest rates. The 30-year yield exceeded 5.5%, while the 2-year yield climbed to 4.92%, with stock futures falling as investors braced for additional Federal Reserve rate hikes. Analysts identify 5.25% as a critical technical resistance level for the 10-year yield, with a breakout potentially accelerating gains toward 5.6% or even 6%, a scenario some strategists now discuss. Global bond markets showed similar pressure, with UK 10-year yields at 5.42%, German Bunds at 3.65%, and Japanese 2-year yields near 1.97%. This week's jobs report and inflation data will be crucial tests, as economists expect only 100,000 new jobs in September, though recent surveys suggest possible upside surprises.