Federal Reserve Chair nominee Kevin Warsh speaks during a Senate Committee on Banking, Housing, and Urban Affairs hearing on his nomination in April. He was confirmed on Wednesday. Photo by Bonnie Cash/UPI | License Photo
The U.S. treasury sold $25 billion of 30-year bonds Wednesday, yielding 5.05% after reports showed higher inflation from the war with Iran, the highest yield in a year.
The yield on the 30-year bond jumped more than 10 basis points to yield 5.12%, the highest since May 22, 2025, CNBC reported.
The yield on the 10-year treasury note, which is the main benchmark for U.S. borrowing, jumped more than 11 basis points to 4.57%, while the two-year-treasury note jumped more than 8 basis points to 4.08%.
A basis point is .01%, CNBC said. The auction marked the first time since 2007 that the government issued a 5% yield on a 30-year debt.
Secondary-market yields also rose Thursday after the Producer Price Index Final Demand rose to 6%, the highest since January 2023.
Rising Treasury yields increase borrowing costs and show the appeal of safer investments, which can pinch the financial conditions of investors and businesses. It can also mean rising opportunity cost of holding assets such as bitcoin and gold.
Markets now show a 55% chance of a Federal Reserve rate hike by April 2027, Yahoo Finance reported. This goes against President Donald Trump’s demands to lower interest rates. It could put new Fed Chairman Kevin Warsh, who was confirmed Wednesday, in a difficult position.
In March, the Fed held its interest rate steady at 3.5% and 3.75% range, though that was under Fed Chairman Jerome Powell. He said he will stay on the Fed Board of Governors.
The bond market changes remind us that “inflation is still a problem … debts and deficits matter (particularly in Britain) and sovereign bonds that are heavily owned by foreigners are now a source of funds,” CNBC reported that Peter Boockvar, chief investment officer of One Point BFG Wealth Partners, wrote in a morning note.
“Long end rates are now in control of monetary policy,” he added. “I wish Kevin Warsh the best … but he will still be subject to his surrounding macro circumstances.”
This week in Washington
Vice President JD Vance speaks during a news conference on anti-fraud initiatives in the Indian Treaty Room of the Eisenhower Executive Office Building at the White House on Wednesday. Photo by Daniel Heuer/UPI | License Photo
