20 hrs ago
Thirty-Year US Treasury Yield Hits 5.34% as Oil Stokes Inflation
US government borrowing costs rose sharply on Thursday.
The interest rate on 30-year government bonds reached its highest level since 2007.
Oil prices also jumped by more than 4%.
More expensive oil can make many goods and services cost more.
This made investors worry that inflation may stay high.
As a result, traders became more likely to expect the Federal Reserve to raise interest rates.
The European Central Bank also raised its deposit rate by 25 basis points.
Investors are now waiting for US inflation data due on Friday.
The US Treasury is trying to reduce pressure on longer-term bonds by buying some debt back.
The 30-year US Treasury yield reached 5.34%, its highest level since 2007.
Two-year Treasury yields rose above 4.5% for the first time since 2024.
Oil prices climbed more than 4%, renewing concerns that inflation could remain elevated.
Traders raised the odds of a Federal Reserve rate hike next week to about 70%.
Investors are awaiting Friday’s US consumer price index data for clues about monetary policy.
- Who
- US Treasury and bond-market investors, with the Federal Reserve and European Central Bank central to rate expectations.
- What
- US government bond yields surged, with the 30-year Treasury yield touching 5.34%.
- Where
- The move centered on US Treasury markets and also affected UK and euro-zone bond markets.
- When
- Thursday; US consumer price index data is due Friday, and traders are assessing a possible Federal Reserve rate hike next week.
- Why
- Oil prices rose sharply, raising concerns that energy costs will keep inflation elevated and encourage further interest-rate increases.
Key facts
- 30-year Treasury yield
- Touched 5.34%, the highest level since 2007.
- Two-year Treasury yield
- Rose above 4.5%, its highest level since 2024.
- Oil prices
- Benchmark prices increased more than 4% to their highest level since May.
- Rate-hike odds
- Traders put the probability of a Federal Reserve hike next week at about 70%.
- October pricing
- Markets fully priced a rate increase by October rather than December.
- European Central Bank rate
- The European Central Bank raised its deposit rate by 25 basis points to 2.5%.
- Treasury buyback
- The US Treasury plans to buy back as much as $6 billion of debt in the 10- to 20-year sector.
Sources
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