- U.S. Treasury yields hit their highest level in more than two decades on Thursday as a global bond sell-off deepened.
- The 10-year Treasury yield rose 4 basis points to 5.3338%, breaching a level last seen in April 2002, according to LSEG data.
- The 30-year yield surged to 5.6702%, its highest level since July 2002.
- The 2-year yield was reported at 4.91%.
- The German bund yield reached 3.6179%, the highest since 2008.
- A global selloff in fixed-income has driven benchmark yields to their highest levels, with concerns over political action to tackle fiscal deficits and sticky inflation persisting.
- Bond yields are climbing almost daily around the world, sparking a heated debate over the reasons why and how much further they have to run.
U.S. Treasury yields have reached their highest levels in over two decades, with the 10-year yield climbing to 5.3338% and the 30-year yield surpassing 5.6702%. This surge is part of a broader global bond selloff that has raised concerns among investors.123
The global selloff in fixed-income markets has been attributed to fears surrounding fiscal deficits and persistent inflation. According to a recent Markets Pulse survey, more than half of the 173 respondents expect 30-year yields to hit 6% by the end of the year.6
The 10-year yield has not been this high since April 2002, reflecting a significant shift in the bond market. The 30-year yield also reached its highest level since July 2002, indicating rising borrowing costs for mortgages, auto loans, and credit card debt.
As government borrowing costs continue to rise globally, analysts warn of challenges typically associated with debt-distressed emerging market sovereigns. The Institute of International Finance highlighted that major economies are facing persistently large deficits and increasing interest expenses, raising alarms about the sustainability of current fiscal policies.
Overall, the bond market's turbulence is compounded by geopolitical tensions, including the ongoing conflict involving the U.S. and Israel, which has affected crude oil exports from the Middle East.
“The 30-year yield rose to 5.6702%, its highest since July 2002, while the German bund hit 3.6179%, the highest since 2008. Investors worry about persistently large fiscal deficits and sticky inflation, with oil prices above $100 a barrel adding to pressure.”
CNBC
