New Delhi, Sept. 24 -- US Treasury yields surged sharply on Wednesday, with the benchmark 10-year yield climbing above 5 per cent to its highest level since July 2007, as a spike in oil prices, stronger-than-expected business activity and a weak Treasury auction intensified inflation concerns and raised expectations of further interest rate hikes by the US Federal Reserve.

The sell-off in bonds pushed the 5-year Treasury yield up 15 basis points to 4.99 per cent, while the 10-year yield jumped 14 basis points to 5.11 per cent. The 30-year Treasury yield rose 10 basis points to 5.40 per cent.

The sharp rise in yields has significant implications for financial markets and the broader US economy. Higher Treasury yields raise borrowing cost...