Yield on 30-Year Treasuries Hits 25-Year High Amid Inflation Worries

The U.S. Treasury Department's auction of $25 billion in 30-year bonds ended with a yield of 5.216%, the highest level since 2001, on August 13.

Market participants are concerned about deep-seated inflation worries that are driving up long-term borrowing costs, despite falling oil prices providing some support for Treasuries in the secondary market.

Last month's Federal Reserve policy meeting, where Chair Kevin Warsh declined to outline how the central bank would bring inflation back under control, is seen as a catalyst for this selloff.

Goldman Sachs analyst Robert Kaplan notes that competing forces are tugging at the inflation outlook, with both inflationary and disinflationary pressures at play.