10-year Treasury yield jumps back above 5% as oil gains and more Fed rate hikes expected

Traders work at the New York Stock Exchange on May 13, 2026. NYSEU.S. Treasury yields jumped on Thursday, sending the 10-year note above 5% alongside a move higher in oil prices and expectations of further Federal Reserve hikes.

The yield on the 10-year U.S. Treasury note — the benchmark for mortgages, auto loans and credit card debt — rose more than 7 basis points to 5.068%.

The 2-year Treasury note yield, more sensitive to short-term Fed interest rate decisions, jumped more than 11 basis points to 4.843%. The longer-dated 30-year Treasury bond yield rose more than 5 basis points to 5.40%.

One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely to one another.

The rise in oil prices came after President Donald Trump said, "We don't need a deal with Iran," raising concern that the war in the Middle East will continue indefinitely. West Texas Intermediate futures gained 0.4% to $86.86 a barrel, while Brent crude was ahead about 1% to $93.60 per barrel.

Tuesday's hotter-than-expected consumer price index reading has investors anticipating more rate increases from the Fed. Goldman Sachs added another rate hike to its forecast on Wednesday, now expecting an additional quarter percentage point increase in March.

Traders are pricing in 100% odds of an increase in December, with the chance of a half percentage point increase standing at about 13%, according to the CME Group's FedWatch tool.

Another inflation report is due Friday, when the October producer price index, which tracks wholesale prices, is expected to show a 0.4% rise in October, down from the 1.3% surge in September.

On Thursday, investors looked to October's home sales report from the National Association of Realtors, which showed that existing home sales reached their lowest level in more than 16 years last month.

"Fed officials want to push rates even higher to fight inflation, but all this is doing is pushing the housing correction down into the depths of depression," said Chris Rupkey, FWDBONDS chief economist. "It's dark out there with no homebuyers anywhere to be found."

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