Treasury Yields Spike to 5.311% as Deficit Concerns and Oil Prices Surge

On July 23, 2026, the 30-year Treasury yield rose more than 4 basis points to 5.311%, the highest level since June 2007. The 2-year note climbed to 4.182%, and the 10-year benchmark reached 4.724%. The jump coincided with a sharp rise in oil prices—West Texas Intermediate settled at $84.50 per barrel and Brent at $90.87—as the 60-day deadline for a U.S.–Iran peace deal expired and Tehran signaled a willingness to take an offensive stance.

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Investors are weighing the impact of the U.S. budget deficit, which the Treasury Department said hit its largest monthly shortfall in more than five years, driven by rising Medicare costs and higher interest on the federal debt. Strategists at Barclays noted that the surge in yields reflects higher term premiums rather than just inflation data. The market also remains sensitive to geopolitical risk, with the Middle-East conflict and the looming Iran-U.S. deadline adding to inflationary worries.

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Anshul Pradhan, head of U.S.

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• “We believe investors are increasingly evaluating Treasury securities through the lens of longer-term fiscal sustainability and less through the lens of inflation, monetary policy, and growth, at least for the longer end of the Treasury curve,” — Anthony Saglimbene, Ameriprise chief market strategist, in a Monday note

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Market participants await the release of the Federal Open Market Committee minutes, due Wednesday, for further insight into the Fed’s policy outlook. The Fed previously voted 9-3 on July 29 to keep the policy rate steady at 3.5%–3.75% for the fifth consecutive meeting, with three dissenters calling for a 25-basis-point hike.

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