Treasuries Fall as Rising Oil Prices Lift Inflation Expectations

Treasuries fell, lifting yields to the highest levels in several weeks, as climbing oil prices drove up inflation expectations and curbed expectations for Federal Reserve interest-rate cuts.

Short-maturity yields rose more than four basis points as traders priced in reduced chances of a Fed rate cut before the end of next year. The two-year note’s yield, more sensitive than longer tenors to central bank policy shifts, topped 3.85% for the first time since April 7. US yields trailed steeper increases in most European bond markets.