Treasury Yields Reach Highest in 19 Years as US Rejects Hormuz Proposal

02:55 PM EDT, 09/28/2026 (MT Newswires) -- US Treasury yields surged Monday, and crude oil remained elevated after the US rejection of an Iranian proposal to reopen the Strait of Hormuz outweighed reports of upcoming talks between Qatar and Iran to help end the war. Iran last week offered to reopen the strait if the US met certain conditions. Trump told reporters on Saturday that he had rejected the offer, according to several media outlets, raising concerns that the US-Iran war will continue after the midterm elections in November and further fuel inflation. Qatari mediators are likely to hold separate talks with Iranian Foreign Minister Abbas Araqchi in New York and with the US on Monday or Tuesday, Reuters reported Monday, citing an official briefed on the negotiations. The 10-year jumped as high as 5.274%, the highest since 2007, and was recently trading at 5.234%. The 2-year climbed 4.46 basis points to 4.912%, the strongest level since mid-2023. The 30-year advanced to 5.565%, the loftiest since 2004. US yields followed a move up in Japan government bonds where the 10-year rose to 3.103%, hitting its highest level since 1996. The 30-year yield at 4.17% was the most since 1999. Government bond yields advanced in several countries including in the United Kingdom, Germany, France, Australia and Canada. The front-month West Texas Intermediate oil contract, the US benchmark, fell 1.1% to $91.44 after trading 3.4% higher earlier in the session. The global standard Brent crude advanced slipped 0.5% to $103.84, also turning the corner after jumping 3.5% intraday. Traders are also pricing in a higher probability of another interest rate increase in the US after the Federal Open Market Committee raised the benchmark range by 25 basis points earlier this month. The likelihood for another increase in October now stands at 68%, up from 58% a month ago, according to the CME Group Fed Watch Tool. The Treasury said Monday it sold $95 billion of 91-day bills at a high rate of 4.11%, up from 4.015% in last week's auction and 3.54% in the first auction of 91-day bills this year. Demand was firmer despite the higher yields, with the bid-to-cover ratio climbing to 2.99 from 2.77 last week and 2.84 at the Jan. 5 auction. The government also disbursed $82 billion of 182-day bills at a high rate of 4.285%, up from 4.155% last week and 3.475% at the Jan. 5 auction. The bid-to-cover ratio rose to 2.64 from 2.62 last week but was below a level of 3.28.