The benchmark 10‑year Treasury yield jumped 8 basis points to 5.041% at 4:07 a.m. ET, having briefly topped 5% on Monday before easing back.

One basis point equals 0.01 percentage point; yields and prices move inversely. The 30‑year Treasury yield, more sensitive to geopolitical risk, rose 7 basis points to 5.4%, while the 2‑year note gained about 5 basis points to 4.686%.

The move precedes the Federal Reserve’s two‑day policy meeting that starts Tuesday, with markets now pricing a higher probability of a quarter‑point rate increase after August inflation stayed well above the Fed’s 2% target.

According to the CME FedWatch tool, traders see more than a 92% chance the Fed will lift rates by 25 basis points at its upcoming meeting.

“U.S. 10‑year Treasuries are highly sensitive to inflation expectations, and with inflation gauges still above the Fed’s 2% target, we expect this tight link to persist for a while,” said Jonathan Liang, Standard Chartered’s CIO of fixed income and FX.

Experts told Verum that the close oil‑Treasury relationship could add further upward pressure on yields if crude prices stay elevated, since higher energy costs feed inflation expectations.

BMO Capital Markets notes that the one‑month rolling correlation between front‑month WTI crude and the 10‑year Treasury yield has risen to 0.96.

“Speaking simply, higher oil prices drive higher inflation expectations and the reverse is also true,” said Steve Sosnick, chief strategist at Interactive Brokers.

He added, via email to Verum, that although the oil‑yield link is usually modest, current geopolitical forces behind oil prices and global inflation have made the correlation much tighter.

“As long as oil prices remain firm and keep drifting higher, they will continue to put upward pressure on interest rates,” Sosnick concluded.

The benchmark 10-year Treasury yield

The 10-year yield jumped 8 basis points to 5.041% as of 4.07 a.m. ET. On Monday, the 10-year yield briefly crossed 5% before sliding back slightly.

One basis point equals 0.01 percentage point, and yields and prices move in opposite directions.

The yield on the longer-dated 30-year Treasury bond, more sensitive to geopolitical risks, rose 7 basis points to 5.4%. The 2-year Treasury note yield climbed about 5 basis points to 4.686%

The move comes ahead of the Federal Reserve’s two-day policy meeting beginning Tuesday, with markets pricing in higher chances of a quarter-point rate hike after August inflation remained well above the central bank’s 2% target.

Traders are pricing in a more than 92% chance that the Fed will raise rates by 25 basis points in its latest meeting, according to the CME FedWatch tool.

“U.S. 10-year treasuries are highly sensitive to inflation expectations, and with inflation gauges still above the Fed’s target of 2%, we believe this tight correlation will likely persist for a while,” said Jonathan Liang, Standard Chartered’s CIO of fixed income and FX.

The tight relationship between oil and Treasurys could add further upward pressure on yields if crude prices remain elevated, as higher energy costs feed into inflation expectations, experts told CNBC.

The one-month rolling correlation between front-month West Texas Intermediate crude and the 10-year Treasury yield has climbed to 0.96, according to BMO Capital Markets.

“Speaking simplistically, higher oil prices lead to higher inflation expectations and vice versa,” said Steve Sosnick, chief strategist at Interactive Brokers.

“Normally, the relationship isn’t as clean as it is now, but the geopolitical drivers behind the price of oil and global inflation are so prominent that the normally modest correlation has become much tighter,” he told CNBC via email.

“As long as oil prices remain firm and continue to drift higher, this will add pressure to interest rates,” he added.

OpenAI’s Sam Altman offered the most thorough remarks to date on potential AI safety frameworks, following his alignment with Anthropic’s Dario Amodei and Elon Musk in urging a temporary slowdown of the sector. Tensions surrounding AI safety have surged after an Anthropic researcher resigned last week, claiming that developers feared the technology could “cause humanity’s demise by the end of the decade,” a warning that spurred similar alarm among OpenAI staff and other lab members. The leaders of major AI firms have recently shown uncommon agreement, as Altman and Musk jointly endorsed Amodei’s essay calling for a measured pace in advancing the most powerful AI models. AI‑related stock prices fell on Monday as investors reacted to the statements, while U.S. President Donald Trump rejected the CEOs’ caution on Sunday, arguing that a slowdown would hinder America’s dominance in AI compared with China. Sam Altman outlines two potential disastrous outcomes for AI development. Altman stated in a late‑night X post that a federal framework establishing uniform safety standards for frontier AI is welcome, emphasizing that “no level of American competitive pressure can excuse reckless behavior.” He warned that AI advancement might lead to loss of control over future outcomes and could concentrate excessive power in the hands of a single individual or corporation. At the same time, Washington legislators are rushing to respond to demands for regulatory safeguards. The developments occur as Anthropic and OpenAI prepare for what could be historic initial public offerings, with Altman stating in a Fortune interview on Saturday that the companies will not pursue an IPO in 2026. Amodei’s three‑step plan. A primary safety concern involves models gaining the capacity to enhance their own performance, a process called recursive self‑improvement (RSI). He noted that since early summer AI has been progressing rapidly, largely because AI systems are now capable of creating the next generation of AI themselves. He warned that without oversight, the technology could outpace our capacity to comprehend and control it, making careful, possibly restrained, development essential. He outlined a three‑step approach designed to slow development while preserving commercial benefits and maintaining the United States’ competitive edge in AI. The plan calls for every frontier AI company to provide external evaluators with access comparable to that of employees — a commitment Anthropic has already made — and urges all such labs to adopt shared safety standards, curb uncontrolled AI acceleration, and coordinate globally. On Saturday, Altman posted on X that he concurred with Amodei’s call for AI firms to “pace the frontier,” adding that adopting independent evaluators with employee‑level access is a worthwhile step and that his company will follow suit. Altman said in a Monday post that consistent regulations to manage frontier risk — such as independent auditors — are valuable, but clarified that “pacing” does not equate to halting progress, which remains swift and ongoing. He concluded that the costs of pacing are justified, asserting that no level of American competitive pressure can excuse reckless actions that let capabilities outpace alignment and monitoring. He noted that governmental assistance will be needed for international coordination, but emphasized that the industry should first act independently. Coordinating AI safety measures and a sector‑wide slowdown with Chinese AI developers will present significant hurdles. The United States and China continue a rivalry for AI supremacy, with tensions rising as Chinese models become increasingly sophisticated and widely adopted. He added that the toughest aspect of his proposal is the possibility that rival nations may decline to adopt similar measures. He noted that the long‑term goal would be collaborative effort to impose a speed limit on AI progress, according to an interview with CBS News’ “Sunday Morning.” He acknowledged that achieving such a limit would be challenging due to strong incentives to get ahead and the military advantages involved, admitting uncertainty about feasibility but urging an attempt. The essay has attracted criticism in China, with state‑owned Global Times stating on Monday that “Amodei’s proposals aim to cast China’s legitimate AI development as a threat and exacerbate U.S.–China confrontation.” China’s Foreign Ministry responded on Monday, labeling the CEOs’ remarks as “fearmongering.”