The yield on the 10-year US Treasury note reached 5.15% on Thursday, the highest level since 2007, as a broad selloff hit government debt. The 30-year Treasury yield climbed to 5.44%, its highest since June 2004, while the five-year yield surpassed 5% for the first time in nearly two decades. This pressure intensified after a $70 billion five-year note auction attracted weak demand and cleared at 5.033%, more than 3 basis points above expectations.

Markets now price in a 64% to 70% chance of a Federal Reserve interest rate hike in October following a September composite PMI of 58.4, the strongest expansion in over five years. Oil prices rising above $100 and inflation concerns have further driven average 30-year mortgage rates up to 7.25%. The selloff extended to global markets on Thursday, with Japan's 10-year government bond yield reaching its highest level since 1996.