Long-dated Treasury yields surge as inflation fears and fiscal concerns drive investor demand for higher term premiums.
US 30-year Treasury yields rose to 5.197%, the highest since July 2007, as inflation concerns and rising energy prices reshape market expectations. The 10-year yield also advanced to 4.683%, reflecting broader pressure on fixed-income assets.
The move follows heightened worries over persistent inflation, fueled by geopolitical tensions in the Middle East and elevated oil prices. Investors are now pricing in a reduced likelihood of Federal Reserve rate cuts, with some speculating the next policy shift may not be dovish. Fiscal deficits and increased government borrowing further weigh on long-dated Treasuries.
A Bank of America survey revealed 62% of fund managers expect the 30-year yield to exceed 6% within a year. Market participants remain focused on Middle East developments, which could ease inflation pressures if tensions de-escalate.