30-year Treasury yield tops 5.19%, highest since before the financial crisis

Yields on U.S. Treasurys advanced Tuesday as investors continued to dump bonds on fears inflation is reigniting. The 30-year Treasury yield hit the highest level in nearly 19 years.

The longer-dated 30-year Treasury bond yield rose about 6 basis points to 5.198%, its highest level since July 2007.

The 10-year U.S. Treasury note yield — the key benchmark for mortgage and auto loans and credit card debt — added 6 basis points higher to 4.687%, the highest since January 2025. The 2-year Treasury note yield, which reacts to expectations of short-term Federal Reserve interest rate moves, rose by more than 3 basis points to 4.135%.

One basis point equals 0.01%, and yields and prices move in opposite directions.

The move in rates followed a string of reports last week suggesting inflationary pressures were reaccelerating as rising oil prices tied to the conflict in Iran pushed costs higher. The development spooked fixed income investors and caused traders to bet the next move by the Fed could be a rate hike, instead of a reduction.

“It’s a real problem,” said Jim Lacamp, senior vice president at Morgan Stanley Wealth Management, on CNBC’s “Squawk on the Street.” “When we started this year, everybody expected rates to come down — that was part of the bull case. Now, it looks like we’re going to see a rate hike.”

Elevated borrowing costs on products such as credit cards and mortgages may weigh on consumer spending, while higher yields could also slow longer-term economic growth and put pressure on the lofty valuations in equities.

Ian Lyngen, BMO’s head of U.S. rates, said if and when 30-year rates manage to reach 5.25% in the next few weeks, there will be a “more durable pullback” in equity valuations.

The S&P 500 slid 0.8% Tuesday, while the tech-heavy Nasdaq Composite pulled back 1.2%. Both benchmarks were headed for their third losing session in a row. 

A Bank of America survey published Tuesday showed 62% of global fund manager respondents expect 30-year Treasury yields to hit 6%, equaling the highest level since late 1999 and an increase of about 85 basis points from current prices. Only 20% of respondents are targeting a 30-year yield of 4%.

Yields on longer-term government debt in the U.K. and Germany are also elevated. The yield on German 30-year bunds stood at 3.684% Tuesday, with Britain’s 30-year gilt yield rising less than 1 basis point to 5.773%. Japan’s 30-year yield hit a record this week.

Oil prices eased after President Donald Trump announced he was calling off a plan to attack Iran. West Texas Intermediate futures shed 0.4% to $103.81 per barrel in early trading. Brent crude lost 1% to $110.96. 

— With reporting from Alex Harring and Hugh Leask.