US government borrowing costs have climbed to 5% for the first time since October 2023, as escalating conflict in the Middle East pushes oil prices sharply higher and intensifies a sell-off across global bond markets. The yield on 10-year US Treasury bonds (a key benchmark used worldwide to price loans, mortgages, and other assets) reached the threshold on Monday, with Brent crude surging past $108 a barrel after Houthi forces attacked Saudi infrastructure and seized the island of Perim in the Bab al-Mandab strait, forcing Riyadh to close a critical east-west oil pipeline. The spike in borrowing costs, which also spread to European bond markets, adds to pressure on households and businesses worldwide ahead of an expected interest rate decision by the US Federal Reserve on Wednesday.