US benchmark yield rises to highest level since early 2025 amid global bond selloff

The US 10-year Treasury yield surged to roughly 4.75% on August 18, marking its highest point since early January 2025. The 30-year yield told an even more dramatic story, climbing to between 5.23% and 5.33%, a level the bond market hasn’t seen since mid-2007. What’s driving the selloff Three forces are converging to push yields higher. First, inflation expectations have ratcheted up after oil prices soared above $91 per barrel. The catalyst: US-Iran peace negotiations collapsed, removing what had been a potential pathway toward more stable energy supply. Second, the sheer volume of government debt hitting the market is creating its own gravitational pull on yields. Larger budget deficits mean more Treasury supply, and more supply without a proportional increase in demand means sellers have to offer juicier yields to move the paper. Third, concerns about corporate debt levels are adding fuel to the fire. Companies that loaded up on cheap borrowing during the low-rate era are now staring down refinancing costs that look dramatically different from what they locked in years ago. This isn’t just an American problem The selloff is decidedly global. Japan’s 10-year government bond yield...