Worries about inflation intensify, the 30-year U.S. Treasury yield soars to 5.18%

Deep Tide TechFlow News, May 19 — The yield on the 30-year U.S. Treasury bond rose to 5.181% at one point on Tuesday, reaching the highest level since 2007, driven by investor concerns over accelerating inflation triggering a sell-off in global bond markets.

The last time the 30-year U.S. Treasury yield reached this level was just before the 2007 global financial crisis, with yields on all maturities rising. This move has set a new high, and recent bond sell-offs have pushed government bond yields worldwide to multi-year highs. Due to concerns over energy price surges caused by the war and budget deficits, investors now demand higher returns to hold long-term bonds. If the sell-off continues, higher yields could push up mortgage and corporate loan rates in the U.S., potentially slowing down the U.S. economy.

Ajay Rajadhyaksha, Global Head of Research at Barclays Bank, wrote: “Currently, global debt growth is outpacing economic growth, inflation is worsening, and there is a lack of political will for fiscal reform, leaving investors with little reason to hold long-term bonds.” (Jin10)