Longer-dated U.S. Treasury yields climbed to multi-month highs on Friday amid a notable uptick in oil prices and data that indicated accelerating inflation. The move in yields came after fresh readings showed that consumer and producer prices increased at faster annual rates, and after comments from U.S. leadership that heightened concerns over tensions in a key shipping corridor.
Oil futures advanced about 3% when U.S. President Donald Trump said his patience with Iran was running out. The remarks fed worries about the lack of progress toward a peace agreement to halt ship attacks and seizures around the Strait of Hormuz, a development that contributed to the spike in energy prices.
Government inflation measures released this week showed U.S. consumer inflation posting its largest annual gain in three years last month. Producer prices also recorded their biggest annual rise in four years. The data signaled that energy-related shocks are showing up in certain inflation gauges.
Market moves were concentrated at the short and intermediate ends of the Treasury curve. The yield on the 2-year note, which often tracks market expectations for Federal Reserve policy, increased by 7 basis points to 4.062%. At one point it reached 4.071%, marking its highest level since March 2025.
Meanwhile, the yield on the benchmark 10-year Treasury note rose by 9.3 basis points to 4.552%, touching an intraday peak of 4.558% - the highest level observed since May 2025. The rise in yields reflects market reactions to both the hotter-than-expected inflation readings and the jump in energy prices.
Context and market reaction
The combination of a roughly 3% rise in oil and stronger annual gains in consumer and producer prices has pushed yields higher across maturities. Traders interpreted the data and geopolitical comments as factors that could keep inflationary pressures elevated, reinforcing expectations around interest-rate pathways.
These moves were evident in real-time quotes and intraday highs for both the 2-year and 10-year securities, which reached levels not seen since March and May of 2025, respectively.
Note: This article reflects the data and market moves as reported in the referenced releases and intraday pricing. Details on index and instrument levels were taken from the same market updates cited in the reporting.