30-Year Treasury Yield Hits 5.39%, a 22-Year High, as Global Bond Rout Deepens

U.S. Treasury yields surged on September 24, with the 30-year yield climbing to 5.39%, its highest level since 2004, and the 10-year yield topping 5.15%, extending a bond market selloff that has accelerated through the week. The moves came a day after the 30-year had already struck a 19-year high on Wednesday.

Several forces converged to drive the rout. S&P Global's September purchasing managers' index showed services PMI jumping to 58.7, the highest in nearly five years, and manufacturing PMI rising to 56.7, a level not seen in more than four years. The stronger-than-expected activity data fueled expectations of additional Federal Reserve rate hikes, with traders pricing in better than a 75% probability of an increase at the October FOMC meeting, according to CME Group's FedWatch tool. Hawkish commentary from a Fed official and rising oil prices added further pressure, with Brent crude gaining about 2.8% to $105.95 a barrel and WTI rising 2.2% to $94.40.

The selloff is part of a broader global bond rout. Japan's 10-year JGB yield rose 8 basis points to 3.055%, its highest since August 1996, while U.K. Gilts and German Bunds also moved sharply higher, with yields across various European maturities hitting fresh multi-year peaks. Deutsche Bank analysts attributed the Treasuries move primarily to the strong PMI data and the oil price rebound, saying both "led to mounting speculation about faster rate hikes."