US 30-year Treasury yield hits 5.48%, its highest since 2004, as inflation risks, higher oil prices, resilient growth and rising government borrowing push global bond yields higher.
Global bond markets are under mounting pressure as investors reassess the outlook for inflation, interest rates and government borrowing, with the US Treasury market at the centre of the latest selloff.
The US 30-year Treasury yield climbed to 5.48 per cent on Thursday, its highest level since 2004, while the benchmark 10-year yield touched 5.20 per cent. The moves have intensified concerns that the recent rise in long-term borrowing costs could eventually weigh on households, companies and financial markets.
The selloff has been driven by several forces. Higher energy prices linked to the Iran war have revived inflation concerns, while resilient US economic growth has reduced expectations for a sharp slowdown. At the same time, increased government spending is adding to concerns about the scale of future borrowing.
The 10-year Treasury yield has risen 0.70 percentage points since the Federal Reserve’s June policy meeting and 1.25 percentage points since early March. Investors are increasingly watching the 6 per cent level as a potential threshold that could create greater stress across financial markets.
Higher Treasury yields are already feeding into the real economy. US 30-year mortgage rates have risen to around 7 per cent, roughly one percentage point above their level before the Iran war and close to a two-year high.
More from BusinessWhy the 30-year yield matters
The short-term Treasury market is heavily influenced by expectations for Federal Reserve interest rates. The 30-year yield, however, also reflects investors’ expectations about inflation, economic growth and the government’s borrowing needs over decades.
That makes the latest rise particularly significant. Higher long-term yields mean lower bond prices and increase the cost of financing for the US government.
The pressure is not limited to the US. Germany’s 10-year Bund yield has moved above 3.6 per cent, its highest level in 17 years, while Japan’s 10-year government bond yield reached its highest level since 1996.
Germany’s federal borrowing is also expected to reach a record €525.5 billion in 2026, highlighting the broader increase in government financing needs across major economies.
For now, strong US growth and corporate earnings have helped financial markets absorb the higher yields. But if long-term borrowing costs continue climbing towards 6 per cent, the impact could become more pronounced across mortgages, corporate financing, government debt servicing and asset valuations.
