US Long-Term Yields Soar as Inflation Worries Continue

Longer-dated US Treasury yields continued their upward trend on Friday, reaching fresh highs after upbeat economic data raised concerns about inflation. The 30-year bond yield hit a new 22-year high of 5.5319%, while the benchmark 10-year yield reached a 19-year high of 5.2297%. These increases follow recent worries about higher inflation, which have driven up expectations for another interest-rate hike by the Federal Reserve.

The Federal Reserve raised rates last week in an effort to control inflation, which has risen due to higher fuel prices tied to the US-Israeli war with Iran. Several Fed officials noted that additional rate hikes may be needed to curb price growth. 'The only thing that they can do is slow demand down,' said John Luke Tyner, head of fixed income and portfolio manager at Aptus Capital Advisors.

However, there's a risk of the Fed raising rates too far, according to Tyner: 'You always do it too much.' The recent selloff in bond prices was also exacerbated by weak demand in a $70 billion auction of five-year notes. Long-term yields continued to climb despite another Treasury buyback operation aimed at addressing liquidity in the market.