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US 30-year yields hit highest since 2007 as fiscal and Fed fears mount
The 30-year Treasury yield reached 5.33% Monday, while the 10-year yield pushed above 4.7% and the July budget deficit rose to $432 billion, 48% higher than a year earlier.
US Treasury yields rose across the curve, driven by concerns over a ballooning US fiscal deficit and growing doubts about the Federal Reserve’s independence, according to FXStreet.
The yield on the 30-year Treasury climbed to 5.33% on Monday, the highest since July 2007 during the global financial crisis. Shorter-maturity yields also moved higher, with the 10-year yield above 4.7% at one-year highs and the 2-year yield topping six-month highs above 4.3% before easing toward the 4.2% area on Tuesday.
US Treasury data showed the budget deficit rose to $432 billion in July, 48% above the same month last year, and the largest gap since the $660 billion deficit in March 2021.
FXStreet also cited warnings that investors are demanding higher compensation to hold government debt, and noted concerns that markets may be pricing in less willingness from the Fed to tighten borrowing costs. Rabobank pointed to a broader surge in long-term yields across countries, including the UK, Germany, and Japan.