US 30-Year Treasury Yields Defy Rate Cut Hopes with Record Sustained High

US Treasury yields for 30-year bonds have remained above 5% for one of their longest stretches in nearly two decades, raising concerns about borrowing costs and global asset allocation.

The long bond's yield has traded above 5% for a 13th consecutive trading day, the longest sustained streak since 2007. This has led to alarm among investors and analysts assessing the implications for global financial markets.

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

Investors demand greater compensation for holding US government debt over longer horizons due to America's swelling debt burden and growing fiscal concerns. Bosco Wu, an investment strategist at Bank of East Asia, warns that additional defence spending linked to the Iran war and uncertain tariff revenues could add upwards pressure on long-term Treasury yields.