TechFlow News, May 19: The yield on U.S. 30-year Treasury bonds rose to 5.181% on Tuesday, hitting its highest level since 2007, as investor concerns over accelerating inflation triggered a global bond market sell-off.
The last time the 30-year Treasury yield reached this level was just before the 2007 global financial crisis; yields across all maturities rose during that period. This latest move has set a new high, and the recent bond sell-off has pushed government bond yields worldwide to multi-year highs. Investors now demand higher returns to hold long-term bonds amid fears of soaring energy prices driven by war and widening budget deficits. If the sell-off persists, higher yields could push up U.S. mortgage and corporate loan rates, potentially slowing the U.S. economy.
Ajay Rajadhyaksha, Global Head of Research at Barclays, wrote: “Currently, global debt is growing faster than economic growth, inflation conditions are deteriorating, and there is a lack of political will for fiscal reform—leaving investors with little reason to hold long-term bonds.” (Jin Shi)
