U.S. Long-Term Treasury Yield Surpasses 5.6%, Hits 24-Year High

[Financial News]  

U.S. Treasury yields continued to rise on the 29th (local time).
The 30-year yield, the benchmark long-term rate sensitive to geopolitical volatility, surpassed 5.6%, reaching a 24-year high.
According to CNBC, the 30-year yield surged 0.057 percentage points from the previous session to 5.619%. It was the highest level since 2002.
The 10-year yield, which serves as a global benchmark interest rate and sets the rates for U.S. mortgages, auto loans, and credit card interest, also rose 0.047 percentage points to 5.289%.
The two-year yield, which is sensitive to expectations for the Fed's interest-rate policy, rose 0.015 percentage points to 4.939%.
Treasury yields continued to rise as the United States and Iran entered negotiations through a mediator.
U.S. Treasury yields had been weak at the start of the year amid expectations that the Fed would cut interest rates, but turned upward after war broke out with Iran on February 28. Oil prices climbed and inflationary pressures intensified after Iran seized the Strait of Hormuz, a key waterway through which 20% of global oil and natural gas is transported, disrupting energy supplies. The sell-off in Treasuries was also triggered by a surge in U.S. debt, as Donald Trump's tax cuts increased fiscal-deficit pressures and the enormous cost of the war with Iran added to the burden. Yields, which move inversely to Treasury prices, have continued to rise as their upward momentum accelerated.
The Fed, shouldering the burden of rising Treasury yields and mounting inflationary pressures, raised its policy rate by 0.25 percentage points on the 16th and is now considered almost certain to raise rates again on the 27th and 28th of next month.
According to CME Group's CME FedWatch, the fed funds futures market puts the probability of an additional 0.25-percentage-point hike at more than 72%.

[email protected] Song Gyeong-jae Reporter