treasury department yield
The 10-year Treasury yield topped 5.02% on Tuesday, the highest level since 2007. AFP via Getty Images/Saul Loeb

The benchmark 10-yield Treasury note rose on Tuesday to the highest level since 2007 as the sell-off in government debt one day away from the Federal Reserve's next policy decision.

The note reached 5.041% early in the session before pairing gains. It stood at 5.005% at 8:03 a.m. ET. The yields on the 30 and 2-year Treasury notes also rose.

Odds of a Fed rate hike are above 90%, according to the CME Group's FedWatch tool, clocking in at 92.5% early on Tuesday.

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Yields have continued to climb even though Treasury Secretary Scott Bessent said last week that the department will buy back $6 billion of longer-dated government debt, triple the usual amount.

A recent report noted that the reasury could dip into its $1 trillion General Account (TGA) to help fund its plan to increase buyback of government bonds. The TGA will allow the Treasury with a large chest to fund the strategy and influence long-term bond yields

Broader assets are under strain as oil climbs and tech companies seek to pace the development of frontier AI models.

Top AI leaders agreed during the weekend on the need for a slower pace for frontier AI development. They did after Anthropic CEO Dario Amodei published an essay in which he said companies should slow the rate at which they improve the capabilities of their most advanced models while continuing AI research and development.

President Donald Trump, in turn, appeared to dismiss the calls, saying "we're leading China in AI, we're the most sophisticated country in the world, and frankly I want to keep it that way." "Whoever wins AI wins," he added.

Nvidia CEO Jensen Huang is standing on Trump's side. On Monday he put Trump on speaker while speaking during an industry summit, with the president calling concerns a "hoax."

"The robots will not be taking over. The AI will not be taking over the rest of the world. The whole thing is a hoax," Trump said, adding that those calling for pacing development are "just playing right into the hands of a lot of people that don't want to see it happen. That could be political people, that could also be China."

Huang, in turn, told Trump that "we're going to make sure that everybody wins in the AI race of America."