Treasury-bill yields slated to mature early next month surged, driving them above 7% amid building concern that talks in Washington will fail to resolve the debt-ceiling crisis and the US might default.

The rate on the June 1 and June 6 maturities soared more than a percentage point on the day, while others for early June also climbed sharply. By comparison, the earliest June tenors yield around 4 percentage points above the May 30 issue. 

Eoin Treacy's view

The Fed minutes reflected a split decision between hiking and holding rates. They are not talking about cutting rates but they seldom do until they are actually doing it. The next question is how quickly a deal on the debt ceiling will be made.