A fresh sell-off in US government debt pushed 30-year Treasury yields to their highest level since June 2004 on Friday. Stronger-than-expected consumer sentiment data and a rebound in oil prices extended a month-long slide that has left long-term borrowing costs sharply higher.
Thirty-year yields hit a two-decade high
The sell-off in US government debt resumed on Friday, pushing the country's long-term borrowing costs to a fresh post-2004 high and feeding investor anxiety over the direction of the world's biggest bond market. Thirty-year Treasury yields climbed 0.07 percentage points to 5.53% in New York, ending a brief period of calm during the European session.
The move came after a final reading of the University of Michigan consumer sentiment index came in higher than expected, and as oil prices rebounded from earlier falls. Investors said the data was further evidence of the strength of the US economy, which has fuelled a bruising sell-off in Treasury debt this month.
According to the Financial Times: "don't want to hold risk going into the weekend", said Gennadiy Goldberg, head of US rate strategy at TD Securities. He added there had been an enormous wipeout in positioning over the past few days.
Ten-year yields extend worst month since 2024
Ten-year Treasury yields rose 0.06 percentage points to 5.22%. The yield, a global benchmark for borrowing costs, has jumped more than 0.4 percentage points this month, on track for its worst performance since October 2024.
Brent crude, the global oil benchmark, rebounded to more than $106 a barrel, having earlier fallen as low as $104.34 after news that Tehran had offered Washington a new seven-day proposal to reopen the Strait of Hormuz. European government bonds also weakened on Friday, though by smaller margins, with 10-year gilt yields up 0.01 percentage points at 5.4%.
The jump in bond yields this week was triggered by strong economic growth, which prompted traders to reassess the speed and intensity of interest rate increases by the Federal Reserve. Marcel Thieliant, head of Asia-Pacific at Capital Economics, attributed the shift in sentiment primarily to higher energy prices.
Source: Financial Times
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