Long-term borrowing costs in the US bond market are at a historic threshold, reshaping the balance of the global financial system. The 30-year US Treasury yield, which fell to levels as low as 1.50% in 2020, has continued its upward trend for the sixth consecutive year, becoming central to the macroeconomic outlook. The 30-year yield, averaging 4.96% throughout 2026, represents the highest annual average in the last 22 years, and this persistently high interest rate is deepening discussions about fiscal sustainability.

Longest High Yield Period in 20 Years

Long-term bond data reveals that the current yield regime is moving beyond a temporary fluctuation and signaling a structural change:

Persistence Above the 5.00% Threshold: The 30-year Treasury yield remained above 5.00% for a total of 58 trading days in 2026, recording the longest period of high yields in the last 20 years.

Historical Comparison: Even during the Great Financial Crisis of 2007, 30-year yields only surpassed the 5.00% mark in 50 trading days. In 2023, during a period of intense tightening, this was limited to just 7 days.

Six-Year Trend: The uninterrupted rise since the 2020 lows demonstrates the persistence of the decline in long-term bond prices and the steepening of the yield curve.

Fiscal Structure and the Burden of Debt Serving on Revenues

These yield levels create a direct pressure mechanism on the US federal budget. With the federal debt stock reaching high levels, rising interest rates are eroding budget balances. Net interest payments by the US government have reached a record high of approximately 20% of total federal revenues. This increase in the share of interest payments within public revenues creates a spending item that rivals key budget items such as defense spending and social security.

As long as the fiscal deficit remains uncontrolled and the supply-demand imbalance persists, it is difficult for long-term yields to experience a meaningful and lasting decline. The high volume of new bonds issued by the Treasury to finance the growing budget deficits leads investors to demand a higher "term premium" in return for the long-term risk they undertake.

A Systemic Risk Factor for Financial Markets

The US government debt and interest burden are no longer just a fiscal issue subject to political ceiling discussions. High long-term interest rates push up the global cost of capital, creating significant pressure on risky assets, corporate debt markets, and the real estate sector.

In the fundamental vicious cycle risk facing the markets, the need for new borrowing due to budget deficits increases the supply of bonds in the market, and this increased supply pushes yields upwards. Rising yields further increase net interest expenses, widening the budget deficit. If this mechanism cannot be contained, US Treasury bond risk premiums will remain a key source of systemic risk, leading to recalculations and a tightening of global liquidity.

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