The benchmark U.S. Treasury yield climbed to its highest level since 2002, marking another milestone in a months-long global sovereign debt selloff.

The 10-year Treasury yield briefly broke above its 2007 peak on Thursday, reaching 5.34%. Earlier this week, the 30-year Treasury yield also hit a 24-year high.

Government bonds worldwide continue to face pressure. High oil prices linked to the Middle East war are transmitting through the global economy, and investors are betting that central banks will raise interest rates further.

At the same time, governments are borrowing heavily, and strong investment in artificial intelligence (AI) infrastructure is adding to demand for capital, pushing up financing costs.

Steven Barrow of Standard Chartered said: "Rising government bond yields are a structural, long-term development trend. We believe the rise in yields is part of a process in which financial markets are gradually searching for a 'new normal.'"

Global government bonds have just recorded their worst quarterly performance since 2024. Thursday's declines pushed the U.K. 30-year gilt yield above 6% for the first time since 1998. Some analysts and investors believe long-term U.S. Treasury yields could also reach that level.

Around 9:25 a.m. New York time, the 10-year Treasury yield was up 3 basis points. The 2-year yield fell after Minneapolis Fed President Neel Kashkari noted that the spread between the 2-year Treasury yield and shorter-term rates is at a historic high, suggesting it may be a signal from financial markets.

"Treasuries may look cheap relative to stocks, GDP and the global economic cycle, but judged only against their own history, the bond market still has room to fall further before reaching oversold conditions and staging a sustained rebound."