Oil jumped after the U.S.-China summit wrapped up without any signs that Beijing will lean on ally Iran to reopen the Strait of Hormuz.

That followed a series of U.S. debt auctions this past week that signaled tepid demand for longer-term Treasuries as fresh consumer and producer inflation data came in hotter than expected.

On Wednesday, the Treasury Department sold $25 billion of 30-year bonds at a 5% yield for the first time since 2007.  Before then, no 30-year Treasury carried an interest rate above 4.75%.

It was a stark contrast from mid-February—just before the U.S.-Israeli war on Iran started—when a Treasury offering saw the highest demand ever in the history of 30-year auctions.

In addition to the latest auction of so-called long bonds, sales of three- and 10-year Treasuries earlier in the week also drew less demand than expected.

Skittishness among bond investors is becoming a trend. In March, auctions for two-, five- and seven-year Treasury notes all saw weak demand, forcing yields to go higher than expected.

Higher yields boost interest costs, which are running at $1 trillion a year, worsening the budget deficit and adding even more to the total debt burden.

The deficit is already on a troubling path this year. Last week, the Treasury Department announced it expects to borrow more than anticipated this quarter as incoming cash flow has been softer than initially projected.

Meanwhile, the federal government has to issue trillions of dollars of fresh debt each year to cover the deficit, and must offer a yield that’s attractive enough to investors who see inflation eroding fixed income.

Previous supply shocks were seen as one-off events that would produce temporary price surges. But there’s been a steady tempo of repeated shocks in recent years, including COVID supply-chain chaos, Russia’s invasion of Ukraine, President Donald Trump’s tariffs, and the now the Iran war.

That’s kept inflation stubbornly high, making Federal Reserve policymakers less inclined to remain on course for future rate cuts by “looking through” short-term price spikes.

“More than five years of above-target inflation has reduced my patience for ‘looking through’ another supply shock,” Boston Fed President Susan Collins said Wednesday. “And while it is not my most likely outlook, I could envision a scenario in which some policy tightening is needed to ensure that inflation returns durably to 2% in a timely manner.”

The comments echoed what Fed Governor Chris Waller said last month, when he delivered a speech titled  “One Transitory Shock After Another.”

He said he learned from the Fed’s prior mistake to treat the 2021-2022 inflation spike as transitory and will be cautious during a series of shocks.

“While intellectually it makes sense to look through each shock, with a sequence of shocks, policymakers need to be more vigilant,” Waller explained. “This is because if the shocks hit one after another, they will keep inflation elevated for quite some time. The standard ‘look through’ can become problematic if businesses and households start to believe inflation is persistently high and it affects their price- and wage-setting behavior.”

For his part, Treasury Secretary Scott Bessent insisted that the current energy shock will just be a momentary blip, though he admitted that it could take six to nine months for U.S. oil prices to come back down.

He predicted oil producers will eventually unleash a flood of supply, noting U.S. output is at record highs and the United Arab Emirates’ exit from OPEC means it won’t be limited by the cartel, while other Persian Gulf countries will “pump like crazy.”

“I firmly believe that nothing is more transient than a supply shock and we can we can look through that,” Bessent told CNBC on Thursday.

But bond investors disagree, with U.S., German, Japanese, and U.K. yields all soaring on Friday—and sending stocks tumbling as the risk of higher interest rates deflated this week’s earlier euphoria.

Until traffic through the Strait of Hormuz returns to normal, yields could keep rising if central bankers don’t demonstrate more resolve to rein in inflation.

“Long-end rates are now in control of monetary policy,” Peter Boockvar, chief investment officer of One Point BFG Wealth Partners, wrote in a note Friday.