Goldman Sachs warns investors to remain cautious on long bonds as 30-year yields hit two-decade highs

The 30-year US Treasury yield is sitting at roughly 5.2%, its highest level in nearly twenty years. Goldman Sachs says don’t expect relief anytime soon. In a report published September 9, Goldman strategists George Cole and William Marshall laid out the case for a persistently steep global yield curve, driven by structural forces that no amount of Treasury buybacks is likely to fix. The bottom line for investors: long-duration bonds remain a minefield, even if recent selloffs have made them slightly more useful as portfolio hedges. Why yields are staying elevated The Goldman team points to a handful of forces conspiring to keep long-end yields high. Sustained fiscal deficits across developed economies top the list, a hangover from pandemic-era borrowing that governments have shown little appetite to unwind. Then there’s the AI spending boom. Goldman estimates that AI-related investment could add roughly 1% to global GDP, with governments borrowing heavily to finance their share of the buildout. Energy prices are piling on additional pressure, stoking inflation concerns that make investors demand higher compensation for holding bonds over longer time horizons. Cole and Marshall do e...