30-Year U.S. Treasury Yield Soars to 5.18%, Reaching Highest Level Since 2007

On Tuesday, the yields on long-term U.S. Treasury bonds soared once again, with the **30-year U.S. Treasury yield rising by 5 basis points to 5.18%, reaching its highest level since 2007; the two-year U.S. Treasury yield increased to 4.11%, setting a new high since February 2025**, as global bond markets continued to bear the brunt of significant repricing.

The ongoing selling of U.S. Treasuries was primarily **driven by a rebound in inflation and a worsening U.S. fiscal situation**. Geopolitical tensions have driven up energy prices, further entrenching inflation stickiness; the U.S. fiscal deficit remains high and the debt scale continues to expand, leading to a rapid increase in market concerns over long-term inflation and debt risks.

Previously, the market generally regarded the 30-year U.S. Treasury yield of 5% as a key psychological support level, expecting bottom-fishing funds to follow after the breakthrough, but this round of rapid interest rate hikes has completely shattered traditional trading logic, signaling that the U.S. Treasury market, worth $31 trillion, has officially entered a new phase of high interest rates.

Wall Street institutions continue to bearish on the long-end bond trend. Citigroup pointed out that the next defensive target for the 30-year U.S. Treasury yield is 5.5%, with U.S. core inflation struggling to cool and the economy showing resilience, essentially closing the space for the Federal Reserve to cut interest rates in the short term, leading to a continuous decline in the value of long-end bond allocations.

Barclays stated that against the backdrop of U.S. debt growth outpacing economic growth, weak inflation prospects, and the absence of fiscal reforms, the market lacks the incentive to allocate to long-end bonds. The market has deeply established a core narrative of "long-term high interest rates," with investors thoroughly revising expectations for Federal Reserve policies.

Interest rate swap data shows that market bets on Federal Reserve rate hikes have significantly increased, completely reversing previous expectations for rate cuts, reflecting a fundamental shift in market pricing for entrenched inflation.

As the global asset pricing anchor, the rise in long-end U.S. Treasury yields continues to push up the costs of various borrowings such as mortgages and corporate financing, suppressing the vitality of the real economy, while triggering a global reassessment of equity, bond, and foreign exchange assets, with expectations of continued high market volatility.