US government debt weakened on Monday, with losses concentrated in the 10- to 30-year segment of the curve, which in turn drove a steeper yield curve. This move followed Federal Reserve Chair Kevin Warsh's hawkish remarks at the Jackson Hole Economic Symposium on Friday, which had previously led to a significant flattening of the curve.

Early in the session, yields on the US 5-year and 10-year notes climbed to their highest levels since January 2025. Apart from rising oil prices fueled by the US-Iran conflict, there were few other clear catalysts for the move.

Just after 3:00 PM New York time, long-dated bond yields were up by 3 to 4 basis points, while short-dated yields saw little change. This dynamic steepened the 2s10s yield curve by roughly 3 basis points and the 5s30s curve by about 2 basis points. The 10-year Treasury yield was around 4.75%, up 3 basis points, after touching an intraday high near 4.77%.

The bulk of the selling occurred during the morning session, primarily at the long end of the curve, even as market participants anticipated potential buying from month-end index rebalancing scheduled for 4:00 PM New York time. Yields moved higher alongside oil prices after President Donald Trump, in a Fox News interview, stated that the US would respond to Iran's latest attack on American forces.

In the options market for US Treasuries, trading activity was skewed towards downside protection, with traders using options to hedge against the risk of further sell-offs in the bond market.

As of 4:47 PM Eastern Time, the 2-year Treasury yield was at 4.3415%, the 5-year at 4.5002%, the 10-year at 4.75%, and the 30-year at 5.2444%. The spread between the 2-year and 10-year yields stood at 40.64 basis points, while the gap between the 5-year and 30-year yields was 74.25 basis points.