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US 30-year Treasury auction hits 25-year high borrowing costs
The Treasury sold $25 billion of 30-year bonds at a 5.216% yield, the highest since 2001, as investors demanded a premium over inflation and rising national debt.
Fiscal pressures on the US government intensified after an auction of 30-year Treasury bonds delivered the highest borrowing costs in a quarter of a century, reflecting investor concern about inflation and the country’s growing national debt.
According to the coverage, the Treasury sold $25 billion of 30-year bonds on Thursday at a 5.216% yield, the highest since 2001. Bond yields move higher when prices fall, so the auction result indicates investors are charging a heavier premium to hold long-duration government debt.
Market commentary cited in the writeup said investors are seeking “hazard pay” for lending to the US for three decades, effectively treating inflation risk and fiscal risk as separate considerations. The higher long-term yields are expected to complicate Treasury funding needs as the government faces a growing deficit tied to planned spending and tax cuts.
The article also connects the borrowing costs to an outlook in which policymakers may keep interest rates high for some time, a backdrop that could increase pressure on Treasury to finance deficits at elevated rates.