Investors are increasingly demanding higher compensation for holding US public debt

How far will US government bond yields increase?

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GLOBAL MARKETS INVESTOR’S PORTFOLIO IS 🔥UP +100%🔥SINCE JANUARY 2024

DURING THE MARCH-APRIL 2025 MARKET TURMOIL, MAJOR US INDEXES FELL NEARLY 20%, WHILE THE GMI PORTFOLIO GAINED OVER 5%, FIND OUT HOW BELOW:

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US 30-year Treasury bonds are now paying 5% for the first time since 2007.

A $25 billion auction of 30-year US Treasuries on Wednesday was awarded at 5.046%, the highest rate on a newly issued 30-year bond since the brink of the 2008 Financial Crisis.

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Since 2007, no newly issued 30-year bond had carried a rate above 4.75%, and the lowest rate in the last 20 years was just 1.25% in May 2020.

Demand at the auction was middling, with bidders requiring yields slightly above pre-auction trading levels to participate, suggesting investors are demanding higher compensation for the risk that inflation accelerates further.

This comes as surging energy prices from the Iran war have pushed both CPI and PPI inflation to 3-year highs, lifting market-based inflation expectations and forcing investors to reprice the entire long end of the Treasury curve.

Remember, higher yields mean higher interest paid on US federal debt, which is already the highest on record.

Calendar-related adjustments understated the US budget deficit for March

The US government spending is out of control

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At 5%, the bond market is sending a message that the Fed cannot afford to ignore.

How high bond yields can the US government and the market afford?

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