U.S. Treasury yields rose Tuesday as investors continued to dump bonds on fears of a resurgence in inflation. THE Cash flow over 30 years yield reached its highest level in nearly 19 years.
The yield on the 30-year Treasury note rose about 6 basis points to 5.198%, its highest level since July 2007.
THE US Treasury at 10 years The note yield – the key benchmark for mortgage and auto loans and credit card debt – rose 6 basis points to 4.687%, the highest since January 2025. 2-year Treasury bill the yield, which responds to expectations of short-term interest rate movements from the Federal Reserve, rose more than 5 basis points to 4.127%.
One basis point is 0.01%, and yields and prices move in opposite directions.
The rate move follows a series of reports last week suggesting a reacceleration of inflationary pressures as rising oil prices linked to the conflict with Iran pushed up costs. The development spooked bond investors and led traders to bet that the Fed’s next move could be a rate hike, rather than a cut.
“It’s a real problem,” Jim Lacamp, senior vice president at Morgan Stanley Wealth Management, said on the CNBC show. “Crying in the street.” “When we started this year, everyone expected a rate cut – that was part of the bullish scenario. Now it looks like we’re going to see a rate hike.”
High borrowing costs on products such as credit cards and mortgages could weigh on consumer spending, while higher yields could also slow long-term economic growth and put pressure on high stock valuations.
Ian Lyngen, head of U.S. rates at BMO, said that if and when 30-year rates manage to reach 5.25% in the coming weeks, there would be a “more lasting pullback” in stock valuations.
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Treasury yield at 30 years
THE S&P500 slipped 0.8% on Tuesday, while the technology sector Nasdaq Composite fell by 1.2%. Both indexes were heading for their third consecutive losing session.
A Bank of America survey released Tuesday shows that 62% of global fund managers surveyed expect 30-year Treasury yields to rise to 6%, equivalent to the highest level since late 1999 and an increase of about 85 basis points from current prices. Only 20% of respondents aim for a 30-year return of 4%.
Yields on long-term government debt in the UK and Germany are also high. Performance in German 30 year bonds stood at 3.684% on Tuesday, the British rate Gilding 30 years the yield increases by less than 1 basis point to 5.773%. The Japanese 30-year yield hit a record this week.
Oil prices fell after the president Donald Trump announced that he was cancel a planned attack on Iran. West Texas Intermediate futures lost 0.4% to $103.81 a barrel in early trading. Brent crude lost 1% to $110.96.
— With reporting by CNBC’s Alex Harring and Hugh Leask.
