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A basis point is one-hundredth of one percentage point. Treasury yields added more than one of them, pushing to around 5.322%, just short of the highest reading for that maturity since 2002.
Oil gains and U.S.-Iran tensions are cited as the drivers. Both feed inflation fear, which is the market's concern that rising prices will persist long enough to keep borrowing costs elevated.
Geopolitical friction in a major oil-producing region raises the probability of supply disruptions, and oil markets price in that risk before any barrels actually disappear.
When prices at the pump climb, transportation and production costs follow throughout the economy. The Federal Reserve, tasked with keeping inflation in check, then has less room to cut its benchmark rate.
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