30-Year Treasury Yield Rises to 5.29% on Monday, Highest Since 2007
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The yield on 30-year US Treasuries rises three basis points to 5.29% on Monday, the highest since 2007. The increase extends last week's selloff and pushes up US government borrowing costs, reflecting investor concern over surging national debt and inflation stuck above the Federal Reserve's 2% target. The move comes even as recent inflation, employment and retail sales data took some pressure off the Federal Reserve to raise short-term rates.
Key Facts
- The US Treasury sold $25 billion of new 30-year bonds last week at a yield of 5.216%, the highest for such an auction since 2001.
- The Treasury's 10-year auction a day earlier drew the highest financing cost since 2007.
- The US consumer price index rose 3.4% in July from a year earlier, above the Federal Reserve's 2% annual target.
- July's employment report showed US employers unexpectedly cut jobs in July.
- US retail sales fell by the most in more than a year.
30-Year Yield Surge
The rate on the 30-year Treasury rose three basis points to 5.29% on Monday, the highest since 2007 and closer to that year's 5.44% peak during the early global financial crisis. The increase is part of a broader global bond market trend in which investors demand more compensation for mounting government debts and persistently high inflation. In the US, the movement is also fueled by a sudden ramp-up of corporate borrowing to fund the artificial-intelligence boom and waning demand from traditional buyers of long-dated bonds. Barclays Plc's head of US rates strategy, Anshul Pradhan, said the bank has argued against fading the long-end selloff and continues to do so.
Auction Financing Costs
The US Treasury sold $25 billion of new 30-year bonds last week at a yield of 5.216%, the highest for such an auction since 2001, as the selloff deepened. A day earlier, the Treasury's 10-year auction drew the highest financing cost since 2007. The rise in long bond yields comes even after recent economic data took some pressure off Federal Reserve officials to raise short-term interest rates in coming months.
Inflation and Labor Data
A gauge of underlying inflation released last week showed a more subdued reading. July's employment report revealed that US employers unexpectedly cut jobs in July. US retail sales fell by the most in more than a year. Even so, inflation remains above the Federal Reserve's 2% annual target, with the consumer price index last month rising 3.4% from a year earlier.
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30-Year Treasury Yield Rises to 5.29% on Monday, Highest Since 2007
