Rising inflation fears linked to the Iran war and concerns over government spending have pushed the 30-year US Treasury yield to its highest level since 2007, intensifying pressure on global financial markets.
The 30-year US Treasury yield climbed to 5.2%, its highest level since 2007, as investors dumped government bonds amid mounting inflation fears and concerns over worsening US finances, according to .
The bond sell-off has been fueled by the ongoing Iran war, which has triggered a global energy shock and sent oil and gas prices to four-year highs while the Strait of Hormuz remains effectively closed. Rising energy costs have started affecting other sectors, including food prices and airfares.
The benchmark 10-year Treasury yield, which heavily influences mortgage rates, also surged to 4.67%, its highest level in more than a year.
Similar pressure has hit global bond markets, with the UK’s 30-year gilt yield reaching its highest level since 1998, while Japan’s 30-year bond yield touched a record high.
“The forces driving the sell-off – fiscal deterioration, defense spending, sticky inflation, central bank paralysis – are not resolving in the next week. They are getting worse,” Ajay Rajadhyaksha said in a note.
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