US Treasury yields rose to their highest level in six months yesterday, raising concern that rising mortgage rates could damp a nascent recovery in the economy.

The yield on the benchmark 10-year Treasury note rose 24 basis points to 3.74%, a level last seen in mid-November. The 10-year note has climbed from lows of 2.1% in December. The S&P 500 stock index fell 1.9%.

Long-term yields have been rising as investors respond to evidence of 'green shoots' in the economy, the increasing US debt burden, the risk of a revival in inflation and a flood of new Treasury issuance.

Financial Times