The yield on the US 10-year Treasury bond rises to 4.98%, approaching the 5% threshold.

On the eve of U.S. inflation data release, bearish bond investors are pushing the benchmark U.S. Treasury yield closer to the closely watched 5% level; this data will determine the market's expectations for a Federal Reserve rate hike next week. This week, the 10-year U.S. Treasury yield has climbed 18 basis points, with trading prices already just below this psychological threshold. This level may attract dip buyers or trigger further selling, which could impact global markets. On Friday, the yield stood at 4.98%, marking its highest level since 2023 and approaching the peak seen since 2007. As yields surge, traders are coping with rising oil prices and inflation pressure that has remained above the Federal Reserve's target for five consecutive years. The U.S. CPI report to be released on Friday will be a key focus, as the market currently sees about a 70% probability of a Federal Reserve rate hike at the September 16 meeting. "A 10-year U.S. Treasury yield at 5% looks like a foregone conclusion, not just a forecast," said Padhraic Garvey, Head of Americas Research at ING. "It is a concerning time for the bond market."