US Treasury yields moved higher on Thursday, with the 30-year bond yield touching its highest level since 2004 as persistent selling pressure in global bond markets added to concerns over inflation and interest rates.

The 30-year US Treasury yield rose more than 3 basis points to 5.444% earlier in the session, its highest level since 2004, before easing from the day’s highs. The 10-year Treasury yield also climbed to 5.145%.

Bond prices move inversely to yields, meaning the rise in yields reflected continued weakness in Treasury prices.

These moves followed better-than-expected US economic figures, which renewed inflation fears and expectations of further Fed rate hikes.

The Purchasing Managers’ Index for services in the S&P Global report went up to 58.7 in September from 56.5 in August, the highest level in nearly five years. The Manufacturing PMI also went up to 56.7, the highest in more than four years.

The Fed now has a 66% chance of raising interest rates in October, up from 53% earlier in the day. One month ago, the chance of an increase was less than 10%.

The Fed increased interest rates during the previous week for the first time since 2023.

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The pressure has extended beyond US Treasuries. Bond markets worldwide have faced selling pressure for months amid higher energy prices, resilient economic growth, and concerns about elevated government debt.

The US-Israeli war on Iran has pushed up energy prices, adding another source of inflationary pressure.

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