30-year Treasury yields hit highest since 2007 as Iran warns of 'fully offensive' stance

August 18, 2026 at 09:37 AM2 min

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The 30-year U.S. Treasury yield rose to an intraday high of 5.321% on Tuesday, the highest since June 2007, as investors priced in higher energy costs and inflation risk. Brent crude traded near $91 a barrel for a third day, while Tehran told Reuters it would adopt a 'fully offensive' military posture because permanent ceasefire talks with Washington had stalled. Global bond yields climbed and equities fell, with the Nikkei 225 down 2.1% and MSCI's Asia-Pacific index off 0.7%.

Key Facts

The benchmark 10-year U.S. Treasury yield rose 0.4 basis point to 4.7259%, while 10-year Japanese government bond yields climbed 2.5 basis points to 2.945%, a three-decade high.
U.S. President Donald Trump threatened to bomb Oman if it 'gets in the way' of negotiations over the Strait of Hormuz, following threats against South Korea and Canada this week.
Washington ruled out extending a temporary ceasefire agreement that expired on Monday.
South Korea's KOSPI fell 1.5% after the Seoul market returned from a holiday, while the Nikkei 225 slumped 2.1%.

Treasury Yield Spike

The 30-year Treasury yield reached an intraday high of 5.321% on Tuesday, its highest since June 2007, as soft U.S. economic data firmed bets that the Federal Reserve will refrain from hiking rates to curb inflation. The benchmark 10-year Treasury yield rose 0.4 basis point to 4.7259%, while corresponding Japanese government bond yields climbed 2.5 basis points to 2.945%, a three-decade high. Brent crude traded around $91 a barrel, up for a third day, adding to inflation concerns that spilled into global fixed income.

Iran Threats and Diplomacy

A senior Iranian official told Reuters that Tehran would shift to a 'fully offensive' military posture because efforts to negotiate a permanent end to the war with the U.S. have stalled. Washington ruled out extending a temporary ceasefire agreement that expired on Monday. U.S. President Donald Trump also threatened to bomb Oman if they 'get in the way' of negotiations around the future of the Strait of Hormuz. The Gulf state became the latest American ally to draw Trump's ire this week, following South Korea and Canada.

Equity Market Reaction

The selloff in global fixed income weighed on equities during the Asian trading session. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.7%, dragged down by a 1.5% drop in South Korea's KOSPI as Seoul returned after a holiday. The Nikkei 225 slumped 2.1%, while S&P 500 e-mini futures were down 0.3%. In early European trades, pan-region futures were down 0.4%, German DAX futures were 0.5% lower, and FTSE futures were flat.