U.S. Treasury yields climbed to their highest levels in nearly two decades on Thursday, driven by a sharp rise in oil prices and renewed concerns over inflation.

The 30-year Treasury yield jumped as much as 0.06 percentage points to 5.35 percent, marking its highest level since 2007. The 10-year yield rose above 4.9 percent, its highest point since November 2023, while the 2-year note exceeded 4.5 percent for the first time since 2024.

Oil prices fueled much of the move. Brent crude surged more than 5 percent to above $106 per barrel, and West Texas Intermediate crossed $100 for the first time since May. The gains followed reports of reduced Saudi Arabian oil production and escalating tensions in the Middle East involving the United States and Iran.

Traders increased bets on Federal Reserve rate hikes. Markets priced in about a 70 percent chance of a quarter-point increase at the central bank's meeting next week, with a full move fully anticipated by October.

The bond sell-off extended despite recent actions by Treasury Secretary Scott Bessent. His $6 billion buyback program for longer-dated bonds failed to ease pressure on yields, as investors focused on persistent inflation and higher government borrowing needs.

Wholesale price data released Thursday showed producer prices rising 0.4 percent in August, in line with expectations, while core prices increased 0.2 percent. The figures added to worries that higher energy costs could keep inflation elevated.

Yields have risen steadily this year amid broader fiscal pressures and strong corporate bond issuance. The 30-year yield has now spent more days above 5 percent in 2026 than in any year since 2006.

Markets also reacted to equity declines, with major indexes falling between 0.6 and 0.9 percent. The dollar strengthened while gold and bitcoin retreated.