U.S. 30-year Treasury yields climbed to their highest level since 2007 on Tuesday as stalled efforts to end the U.S.-Iran war and rising fears of further escalation pushed oil prices above $90 a barrel, fuelling inflation concerns and unsettling financial markets.
The yield on the benchmark 10-year Treasury note rose 1.7 basis points to 4.739%, while the 30-year yield climbed to 5.327%, its highest level in 19 years.
Bond markets also came under pressure in Japan and Europe. Japan’s 10-year government bond yield reached a 30-year high, while Germany’s 10-year Bund yield and France’s 10-year borrowing costs also rose to multi-year highs.
Analysts attributed the rise in U.S. bond yields to concerns over increased government borrowing, a widening budget deficit and heavy debt issuance. Strong borrowing by major technology companies to finance artificial intelligence infrastructure has also increased competition for capital.
Investors remain particularly concerned about inflation as the Strait of Hormuz remains largely closed and negotiations to end the U.S.-Iran conflict remain stalled.
Iran has warned it could adopt a more offensive military posture if diplomatic efforts fail, while Washington has ruled out extending the existing ceasefire.
Recent U.S. Treasury auctions have also reflected growing investor concerns. The 10-year Treasury sale recorded a yield of 4.683%, its highest in 19 years, while the 30-year bond auction yielded 5.216%, a 25-year high.
Analysts said investors are increasingly focusing on the rising volume of U.S. government debt and concerns over the country’s fiscal position, adding to pressure on longer-term Treasury yields.
