Mumbai, Aug. 18 -- Monday's rally for oil prices sent Treasury yields in the bond market higher which in turn raised the pressure on the economy and prices for all kinds of investments. The yield on the 10-year Treasury climbed to 4.72% from 4.68% late Friday. It has shot up from just 3.97% before the war with Iran, largely because higher oil prices are worsening inflation and upping the probability that the Federal Reserve will have to hike interest rates.

The 30-year Treasury yield, which is typically sensitive to geopolitical events, advanced more than 4 bps to 5.31%. It reached its highest level since June 2007.

The yield on the 2-year Treasury note which typically reacts in line with short-term Federal Reserve interest rate decisio...