US 30‑Year Treasury Yield Reaches Highest Level Since 2004 Amid Global Bond Sell‑Off

Long‑dated U.S. Treasury yields are now a barometer for how much the equity market can absorb, as rising borrowing costs press on the valuations that have fueled the AI‑led rally and keep the Nasdaq hovering near record highs. Treasury buybacks and yen‑intervention measures have failed to stem the climb, indicating that policy tools have limited reach against a market that remains wary of supply constraints and inflation.

For Australia, the uptick in global long‑end yields lifts Australian government bond yields as well. The Australian dollar is caught between a firmer U.S. dollar and support from the RBA’s anticipated rate hike on Tuesday.

Japan’s 10‑year yield has hit its highest level since 1996, adding another source of pressure. Higher domestic yields could pull Japanese capital out of foreign bonds, including U.S. Treasuries.

Gold is facing headwinds from rising real yields, though demand for it as a hedge against fiscal risk offers some offset.

Energy costs, government borrowing and expectations of further Fed tightening are pushing long‑dated yields higher across the U.S., Germany and Japan. While strong growth has so far cushioned the impact, investors are already speculating whether the 6% mark is next.

The global bond sell‑off deepened on Thursday, with the U.S. 30‑year Treasury yield climbing to nearly 5.5%, its highest level since 2004. The benchmark 10‑year yield rose to about 5.2%, a level not seen since the summer of 2007. The rise has been driven by concerns that high energy costs, resilient growth and heavy government spending will keep inflation elevated, prompting investors to sell long‑dated debt.

The 10‑year yield has risen roughly 70 basis points since the Federal Reserve’s June meeting and about 125 basis points since early March. Rate strategists attribute most of the March‑onward increase to expectations of further Fed tightening, with stronger growth forecasts and higher oil prices accounting for the rest. Recent business‑activity surveys pointing to robust growth and building‑price pressures have raised the odds of another hike.

New York Fed President John Williams noted the economy’s remarkable resilience, while longer maturities carry an extra layer of risk because the 30‑year yield also reflects investors’ willingness to fund government borrowing in the years ahead.

The pressure is global. Germany’s finance agency expects federal borrowing to reach a record €525 billion this year and to rise again next year, driven by refinancing needs and special funds. The 10‑year Bund yield briefly topped 3.6% this month, a 17‑year high. Japan’s 10‑year yield hit its highest level since 1996 on Thursday.

Efforts in Washington to contain borrowing costs have had little visible effect. Treasury Secretary Scott Bessent has intervened to buy yen, so Tokyo does not need to sell Treasuries to support its currency, and he has expanded buybacks of 20‑ and 30‑year debt. Yields have kept climbing regardless.