30-year Treasury yield spikes to 5.08%, 10-year yield hits 4.59% as GOP bill raises deficit concerns [361NBYN4CoC]
Treasury yields moved back to levels that have pressured the economy and financial markets in the past as investors feared a new U.S. tax bill could worsen the country’s budget deficit, a risk highlighted in a Moody’s downgrade of the U.S. credit rating to end last week. The 30-year Treasury bond yield was up about 12 basis points to 5.09%, breaking above the key 5% level for the second time this week and reaching a level not seen since October 2023. The 10-year yield topped 4.6%, and was last 11 basis points higher at 4.59%, returning to levels that caused turmoil in the markets back in April and played a part in President Donald Trump pausing his stiffest tariffs. The 2-year yield advanced 4 basis points, reaching 4.01%. One basis point is equivalent to 0.01%, and yields and prices move in opposite directions. A poor auction at 1 p.m. ET for 20-year debt was the catalyst for taking yields to their highs of the session. BMO called the 20-year auction “lackluster.” The fear is that the buying appetite for U.S. Treasurys could be drying up as the supply of new debt to pay our bills increases.