30-Year Treasury Yield Hits 19-Year High of 5.33% as Fiscal Fears and Inflation Drive Global Bond Selloff

The yield on the U.S. 30-year Treasury bond surged to a new 19-year high of 5.33% on Tuesday, its loftiest level since 2007, before pulling back slightly to around 5.29%, as investors grew increasingly alarmed by the deteriorating U.S. fiscal picture and persistently above-target inflation. The U.S. fiscal deficit in July posted its highest monthly total since March 2021, while ongoing Middle East conflict has pushed oil prices higher, keeping annual inflation well above the Federal Reserve's 2% target.

CVC Marathon's Bruce Richards attributed the global rise in bond yields primarily to supply, as governments flood markets with long-dated debt. The selloff was not confined to the U.S.: euro zone bond yields reached multi-year peaks, German 30-year rates hit their highest since 2011, and Canadian 30-year yields climbed to levels last seen in 2010. Equities retreated sharply in response, with the S&P 500 falling 0.42%, the Nasdaq 100 dropping 1.17%, and the Dow Jones Industrial Average off 0.21%.

Tech stocks, including Nvidia, AMD, Broadcom, and Meta, were among the hardest hit as higher long-term yields compress valuations on growth-oriented equities. Investors are increasingly pricing in stagflation over the next 12 months, a combination of sluggish growth and stubborn inflation that complicates the Fed's path forward.