US 30-Year Treasuries Hover Above 5% for Record Streak

The 30-year US Treasury yield has remained above 5% for its longest stretch in nearly two decades, sparking debate over whether elevated borrowing costs are here to stay. On Thursday, the long bond's yield traded above 5% for a 13th consecutive trading day, matching the longest sustained streak since 2007.

According to Cliff Zhao, chief economist at CCB International in Hong Kong, and Vera Jiang, global strategist, yields hovering around 5% are 'likely to become more common' than in the past. They note that short-term yields largely track Federal Reserve policy expectations, while long-dated Treasury yields increasingly reflect concerns over Washington's fiscal sustainability.

Investors demand greater compensation for holding US government debt over longer horizons, contributing to persistently elevated yields. This could constrain room for future fiscal policy and lead investors to demand a higher long-term risk premium, they warn.