Oil has pushed back above $100 a barrel, and the bond market has taken fright. Brent crude jumped 7% on Thursday to close at $100.69, its highest since before the tentative peace deal with Iran last month. Within hours, the yield on the 10-year US Treasury note had climbed to 4.71%, a level not seen since January 2025.
The two moves are linked. Higher oil feeds inflation, and inflation is what bond investors fear most, because it eats the value of the fixed payments they receive. When that fear rises, they demand a higher return to lend, and yields go up.
