All bets are in, U.S. 10-year yield surges past 5% to highest since 2007

U.S. Treasury yields surged to peaks not seen since 2007 on Tuesday, as global fixed-income desks girded for what many suspects will be just the opening salvo in a renewed series of interest rate increases from the Federal Reserve to tame stubborn inflation.

The benchmark 10-year Treasury yield spiked to a top of 5.0266%, decisively crossing the psychologically critical 5% threshold.

Further out the curve, the ultra-long 30-year Treasury yield climbed to 5.3858%, while short-term 2-year yields jumped to 4.6819% – their highest level since mid-2024 – as interest rate futures priced in a 92% probability of a 25-basis-point Fed rate hike on Wednesday to 3.75% – 4.00%.

Crossing the 5% benchmark on the 10-year Treasury note acts as a powerful macro trigger across global capital markets.