The 30-year Treasury yield hits a 19-year high, surpassing the Schwab U.S. Dividend Equity ETF yield by 2.2 points amid inflation concerns.
The 30-year Treasury yield climbed to 5.33% this week, its highest level since 2005, as inflation fears and government spending pressures drove long-term rates higher. This surpasses the 3.1% yield of the $109 billion Schwab U.S. Dividend Equity ETF (SCHD), creating a 2.2 percentage point gap in favor of bonds.
The last time the 30-year yield reached similar levels was in June 2007, when it peaked at 5.35%. During the 2008 financial crisis, yields collapsed to as low as 2.53%, delivering both income and capital gains to bondholders who locked in rates at the earlier peak.
Investors now face a rare yield advantage in Treasuries over dividend stocks, a dynamic not seen since 2007. The shift reflects heightened demand for risk-free assets amid economic uncertainty.