High Oil Prices and Inflation Reignite as U.S. 30-Year Yield Hits Highest Level Since 2007

[The Financial News New York=Reporter Lee Byung-chul] The yield on U.S. Treasury bonds surged amid renewed concerns that inflation is accelerating again. In particular, the 30-year Treasury yield jumped to its highest level in about 19 years, heightening tension across financial markets.
According to CNBC and others on the 19th local time, the yield on the U.S. 30-year Treasury note rose intraday to 5.198%, marking its highest level since July 2007. The 10-year Treasury yield also climbed to 4.687%, the highest since January 2025. The 2-year Treasury yield, which is highly sensitive to the Federal Reserve's policy rate, also jumped to 4.127%.
Market watchers say recent inflation data and the sharp rise in global oil prices are fueling the sell-off in bonds. As the prolonged war between the United States and Iran pushes crude above $100 a barrel, inflationary pressure is widening again.
Jim LaCamp, senior vice president at Morgan Stanley Wealth Management, told CNBC, "At the start of this year, the market was expecting rate cuts, but now it is even looking at the possibility of rate hikes." He added, "It has become a real issue."
The surge in long-term yields is expected to weigh on the U.S. economy as a whole. Higher mortgage, auto loan, and credit card rates could curb consumer spending, while companies may also face higher financing costs. The move is also putting direct pressure on richly valued stock markets, especially technology shares.
Market anxiety is not limited to the United States. Germany's 30-year government bond yield rose to 3.684%, while the United Kingdom's 30-year gilt yield climbed to 5.773%. Japan's 30-year government bond yield also hit an all-time high this week. Concerns about a prolonged period of high interest rates are spreading across major government bond markets worldwide.
In a global fund manager survey released by Bank of America (BoA) on the day, 62% of respondents said they expect the U.S. 30-year Treasury yield could rise to 6%. That is the highest level since 1999. By contrast, only 20% said they expect yields to fall to around 4%.
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pride@fnnews.com Reporter Lee Byung-chul Reporter