US Government Borrows at Highest Rate Since 2001 Amid Inflation Worries

The US government sold $25 billion in 30-year bonds at an interest rate of 5.216%, its highest borrowing cost since 2001.

The sale, which was met with decent demand, follows a day earlier's 10-year auction that drew the highest financing cost at that tenor since 2007.

According to Michal Stanczyk, portfolio manager for the global fixed income team at Allspring Global Investments, 'investors are being asked to absorb a growing supply of government debt globally at a time when deficits remain large, inflation uncertainty persists' and the Federal Reserve is no longer a major buyer.

The Treasury's concern was evident last week when it tweaked its debt-sales guidance in a way that opened the door to potential cuts to long bond supply.