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The yield on 20-year U.S. Treasury bonds exceeded 5.5% on Monday, approaching levels recorded in 2004, amid rising oil prices, escalating inflation concerns, and uncertainty over reaching an agreement on the war on Iran.
The yield on 20-year bonds rose to about 5.53%, while the yield on 30-year bonds reached about 5.47%.
This comes amid expectations regarding the path of U.S. interest rate hikes, alongside selling movements by investors in the bond market, as bond prices typically lead to higher yields when they fall.
In 2004, the yield on U.S. bonds for 20 and 30 years was about 5.59% and 5.58%, respectively.
Earlier on Monday, Brent crude prices rose by more than 2.5% to $107 per barrel, amid escalating tensions between the United States and Iran and concerns about disruptions in oil supplies through the Straits of Hormuz and Bab al-Mandeb.
Energy and bond market movements come as markets follow developments in the war on Iran and its potential impact on inflation and U.S. monetary policy.
On Saturday, U.S. President Donald Trump rejected an Iranian proposal for a 7-day ceasefire, submitted through mediators to open the Strait of Hormuz to ship traffic, describing the proposal as "unacceptable."
Trump accused Iran of "planning to embarrass the whole world by closing the Strait of Hormuz," saying, "They have trapped themselves. I intervened and imposed the biggest blockade in military history. Do you know what happened? They have no money now, because they wanted to close the Strait, and we did it to them."
On Friday, Iranian Foreign Minister Abbas Araqchi said his country had submitted to the United States via Qatar a "decisive" 7-day plan to reopen the Strait of Hormuz to ship traffic, noting that the ball is now in Washington's court.
On February 28, the United States and Israel waged a war on Iran that left thousands dead, and Tehran retaliated with attacks on Israel and U.S. sites in the region.
Later, the United States launched attacks on sites in Iran, amid the impasse in negotiations between the two countries, despite signing a memorandum of understanding in mid-June.
The stalled negotiations are due to disagreements over navigation in the Strait of Hormuz, which is one of the most important strategic corridors for global energy and commodity supplies.
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