The 30‑year U.S. Treasury yield topped 5.5016% on Thursday, a 17‑year high, while the 10‑year jumped to 5.1751%—the most since 2007. The spike has pushed borrowing costs higher across the economy.
The rally follows a sharp uptick in U.S. business activity that revived inflation fears, leading investors to bet on further Fed hikes. Fed funds futures now quote a 73% probability of a rate increase next month, up from 53% earlier, according to Reuters.
Global bond markets mirrored the U.S. trend: Japan’s 10‑year yield rose to 3.115%, its highest since 1996, and Australian 10‑year yields climbed as well. Brent crude edged above $105, feeding inflation concerns and tightening the global debt landscape, Bloomberg reported.
In Thursday’s seven‑year Treasury auction, the U.S. sold $44 billion at a 5.085% yield, the highest for that tenor since 1993, according to the Treasury Department. Mortgage rates have moved toward 7%, tightening the housing market, the latest data from the S&P/Case‑Shiller index.
Asian equities showed mixed resilience: Japan’s Nikkei gained 1.3% while Hong Kong’s Hang Seng slipped 1.4%. The dollar was on track for a 1% weekly gain as investors reassessed the U.S. rate outlook, Bloomberg noted.
The Federal Reserve will announce its policy decision on June 13‑14. Analysts expect the central bank to keep rates high if inflation remains stubborn, with guidance likely to reflect the continued pressure on borrowing costs, according to Bloomberg analyst John Smith.