Treasuries-10-year Treasury yield reaches 5%

High inflation, rising interest rate expectations, heavy corporate and government debt supply, a strong growth outlook and concerns about the long-term U.S. fiscal trajectory have combined to send yields higher in the past month.

“The budget and the deficit and the overall makeup of our debt continues to grow,” said Tom di Galoma, managing director at Mischler Financial.

Yields jumped after data on Friday showed U.S. consumer prices accelerated in August, boosting bets that the Fed will hike rates to stem inflation that is already running well above its 2% annual target.

That was “probably the nail in the coffin,” said di Galoma.

Surging oil prices have added to concerns that inflation will keep worsening as the war with Iran drags on. Oil prices jumped more than 4% on Monday, after new strikes on Saudi Arabian energy infrastructure and attacks on ships in the Middle East compounded supply concerns.