Government borrowing costs surged across the board on Thursday, sending benchmark rates to their highest points since the run-up to the global financial crisis. The yield on the 10-year Treasury note climbed to 5.20%, its first crossing of that threshold in 19 years, while the 30-year yield closed at 5.47%, the highest since 2004. These moves coincided with a 7-year Treasury auction that drew an interest rate of 5.085% and a spike in the average 30-year fixed mortgage rate to 7.45%.

The surge follows a deepening bond selloff driven by stronger than expected US economic data and crude oil prices climbing back above $100 per barrel. Investor demand for debt has weakened, highlighted by a $70 billion five-year note auction that cleared more than 3 basis points above expectations. Market participants are now pricing in a 71% probability that the Federal Reserve will implement another interest rate hike in October.