By Matt Tracy

WASHINGTON, May 18 (Reuters) - Yields on longer-dated Treasury notes climbed to their highest levels in over a year in overnight trading amid a global market selloff in longer-dated bonds driven by war-related inflation concerns.

The yield on the benchmark 10-year Treasury note US10YT=RR climbed to 4.631% in overnight trading, its highest level since February 2025. It has since retraced its gains and was last down slightly at 4.579%.

The 30-year Treasury bond yield US30YT=RR was last down just over two basis points (bps) at 5.106%. It similarly reached its highest level in over a year earlier in the day.

A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes US2US10=RR, seen as an indicator of economic expectations, was at 51.97 bps.

A spike in oil prices last week exacerbated bond investors' inflation concerns as deal talks in the ongoing Iran war showed little progress. The conflict has led to ship attacks and seizures around the Strait of Hormuz, a key oil transportation route.

The shorter-dated two-year Treasury note yield US2YT=RR, which typically moves in step with interest rate expectations for the Federal Reserve, was last down 3.2 bps at 4.052%.