The 30-year U.S. Treasury yield recently surpassed the 5% mark for the first time since April, hitting an intraday high of 5.011%. This spike follows Moody’s downgrade of U.S. credit, removing the country’s Aaa rating amid rising deficits and growing interest expenses. The last time long-term yields crossed 5% was during the April “tariff tantrum,” which caused significant sell-offs in both crypto and U.S. stocks. Back then, Bitcoin (BTC) was near a local low of around $75,000, but it has since rebounded strongly, now trading around $103,000 after reaching a Sunday high of $106,000.
Jim Bianco, head of Bianco Research, notes that the last time the 30-year yield closed at or above 5% was October 31, 2023. The highest recent closing yield was 5.11% on October 19, 2023 — the highest since July 2007, nearly 18 years ago. Currently, yields are just 12 basis points shy of that milestone.
Adding to the economic landscape, the U.K. overtook China in March to become the second-largest foreign holder of U.S. Treasuries, with holdings totaling $779.3 billion, behind only Japan. Both China and Japan have been gradually reducing their U.S. Treasury holdings over the past year, highlighting the U.S.’s ongoing challenge to attract new buyers for its debt.
As the U.S. faces increasing deficits and potential bond issuance, the resulting higher supply pushes yields upward while bond prices decline. Meanwhile, Nasdaq futures are down around 2%, reflecting a broader risk-off sentiment in markets.
Stay tuned as markets watch closely for further developments on U.S. bond yields and their impact on global financial stability.
