Overview
- The 30-year Treasury yield rose to about 5.18–5.20%, its highest reading since 2007, while the 10-year climbed to roughly 4.65–4.69%, with the peak move occurring late last week and carrying into Tuesday trading.
- Traders and strategists say the repricing was driven largely by higher oil prices and inflation expectations tied to the U.S.–Iran conflict and disruptions near the Strait of Hormuz, reinforced by April’s stronger CPI reading.
- The jump in long-term yields erased value from long-duration bond ETFs and pushed down heavily weighted growth stocks as investors reassessed the appeal of equities versus higher risk-free returns.
- Market-implied Fed expectations shifted away from 2026 rate cuts toward a higher-for-longer path and a meaningful chance of a hike next year, and participants are watching April FOMC minutes and upcoming Treasury auctions for further guidance.
- The sell-off is global, with multi-year highs in other G7 long bonds, weak demand reported at a mid-May 30-year auction, and near-term market direction tied to Gulf developments, U.S. Treasury supply and incoming economic data.