US Treasurys firmly in 'danger zone' as 30-year yield nears 19-year peak
The yield on the 30-year US Treasury has climbed past 5.18%, hovering near a 19-year peak. Wall Street strategists warn that the bond market has firmly entered the 'danger zone' as sticky inflation and a widening federal deficit push long-term borrowing costs higher.
Long-term US borrowing costs ticked back near a 2007 high as the 30-year Treasury yield pushed above 5.18%. Investors are absorbing sticky inflation data and the supply pressure that comes with a widening federal deficit.
Wall Street strategists wrote that the market has crossed a critical threshold. Several houses said the rise in yields is squeezing technology stocks, commercial real estate and the mortgage market. The Dow and the S&P 500 both opened the week on a softer footing.
Fading expectations of Federal Reserve rate cuts and the impact of the Iran war on oil prices are adding to bond market strain. Analysts say the focus in coming weeks will be on demand at Treasury auctions and on signals from the leadership team set to take over after Jerome Powell.
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