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US 30-year Treasury yield hits highest level since 2007, weighing TLT
The iShares 20+ Year Treasury Bond ETF, TLT, is down 3.8% for the year as the 30-year yield rose to 5.27%.
The US 30-year Treasury yield climbed to 5.27% on Friday, its highest level since July 2007, extending a breakout that had been contained within a range since 2023, Yahoo Finance reports. The move has pressured ETFs that hold long duration Treasuries, with the long end bearing more of the strain than shorter maturities.
Yahoo Finance reports that the iShares 20+ Year Treasury Bond ETF, TLT, which holds long-term Treasuries and has about $42 billion in assets, is now down 3.8% for the year. That decline has erased most of the 4.3% return the fund posted last year.
The pressure on longer maturities is showing up even though the Federal Reserve held rates steady at its July meeting, according to Yahoo Finance. Three officials dissented in favor of a hike, and market based indicators point to the possibility of another increase as soon as the September meeting, with the fed funds rate currently in a 3.5% to 3.75% range.
While the 10-year Treasury yield also rose to around 4.75%, it remains below its roughly 5% 2023 peak, Yahoo Finance notes. The story also highlights that the 30-year matters less than the 10-year for the real economy, though the 10-year sets the tone for mortgage rates.