Overview
- U.S. long-term yields jumped Tuesday, with the 30-year near 5.2% and the 10-year about 4.69%, reaching their highest levels in years.
- Two-year Treasury yields climbed to their highest in more than a year, signaling expectations that the Federal Reserve could keep rates elevated or even raise them later in 2026.
- Market participants point to sticky inflation linked to higher energy costs from the Iran war and mounting U.S. deficits as the main reasons for the selloff.
- A 30-year Treasury auction in mid-May cleared at 5% for the first time since 2007 with lackluster demand, highlighting weaker appetite for long-dated debt even at higher rates.
- The rout has spread globally, with 30-year yields hitting multiyear highs across Europe and reaching a 30-year high in the UK and a record in Japan, and it is lifting borrowing costs that flow through to mortgages, business loans and government financing.