LONDON, (Reuters) – U.S. Treasury yields increased for a third consecutive day on Monday. Yields on 10-year benchmark debt climbed further past 3% to new 3-1/2 year levels as investors were worried about higher interest rates.

Two months ago, U.S. Treasury yields doubled as the Federal Reserve adopted a more hawkish attitude towards inflation. They raised interest rates by fifty basis points last Wednesday.

The yield curve is steepening further with news Friday of U.S. job growth exceeding expectations in April supporting the belief that the Fed needs to tighten its belt.

For the remaining part of 2018, money markets are expecting a further 200-bps increase in interest rates.

Monday saw the benchmark U.S. Treasury yields rise to 3.2%. This is their highest point since November 2018, when they were at 3.1%. The yields were up six basis points in the last 24 hours.

The spread between the two- and 10-year-old debts was pushed to their highest levels in almost three months, at nearly 50 bps.

Inflation-linked U.S. bond yields hit new multiyear highs. Five-year maturities saw their highest levels of yields since March 2020.

It was also at its highest point in the past two years, with a yield of 0.35% on U.S Treasury Inflation Protected Securities (10-year)