The US 10-year Treasury yield surpassed its 2007 peak on Sept. 30, reaching 5.304%, the highest since May 2002, as persistent concerns about energy inflation and stronger economic data fueled further bond selling.

A brief decline in yields after cooler PCE inflation data failed to hold. The 30-year yield reached 5.641% and the 20-year hit 5.685%, both their highest since 2002. The latest selling extended a quarterly rise of about 85 basis points in the 10-year yield, its biggest since 2016.

Markets were pricing in four more Fed rate increases of 25 basis points each by June 2027, a reversal from expectations nine months earlier for at least 100 basis points of cuts by then. Higher borrowing costs are also reaching homebuyers, with US mortgage rates nearing 7.60%.