Overview
- The 30‑year Treasury yield climbed above 5.19% on Tuesday, its highest level since 2007, while the 10‑year moved toward about 4.67%, and long‑duration bond ETFs fell to multi‑year lows.
- Traders and strategists point to higher oil prices tied to the U.S.–Iran war and stronger April inflation data as the main drivers that lifted long‑term inflation expectations.
- The move has already pushed up borrowing costs that set mortgage and corporate loan rates and reduced the market value of existing long‑dated bonds after a mid‑May 30‑year auction cleared above 5% with tepid demand.
- Long‑end yields rose around the world, with 30‑year gilts, bunds and Japan’s long bonds also at multi‑year highs, signaling a broadly synchronized repricing of sovereign risk.
- The shift has changed market pricing for the Federal Reserve toward fewer 2026 cuts and a greater chance of later hikes, and strategists warn yields could climb further, which would deepen pressure on mortgages, corporate refinancing and equities.