As a researcher tracking bond markets, I observed that the US Treasury auctioned off $25 billion in 30-year bonds yesterday. The final yield for these bonds settled at 5.046%.
The recent sale comes after two reports this week showed rising inflation in the US, which is being fueled by the conflict between the US and Iran.
Iran War Inflation Shock Drives Long-End Yields Higher
The Financial Times reports that a recent US government auction of 30-year bonds resulted in a 5% yield – something that hasn’t happened since 2007.
Bond yields increased yesterday, along with other market rates, after a report showed wholesale prices rose by 6%. This was the largest increase since January 2023.
Long-term interest rates rose today, with the 30-year Treasury yield hitting 5.05% – a level not seen since mid-July. The 10-year Treasury also increased, reaching 4.49%. However, the 2-year Treasury yield, which tends to react more strongly to changes in Federal Reserve policy, dipped slightly to 3.981%.
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— Max Keiser (@maxkeiser) May 12, 2026
Bond Stress Spills Into Bitcoin and Risk Assets
When Treasury yields go up, it becomes more expensive to borrow money, which slows down economic activity. It also makes bonds, generally considered a safer investment, more attractive to investors.
When US Treasury yields rise above 5%, it becomes more expensive to hold investments that don’t produce income, like Bitcoin and gold. This could reduce interest in riskier investments overall.
Currently, the financial markets suggest there’s a 55% chance the Federal Reserve will raise interest rates by April 2027. This indicates increasing worries among investors that inflation might stay high for an extended period, potentially leading the Fed to continue raising rates instead of lowering them as many predicted.
When interest rates go up, people and businesses become less willing to invest in riskier assets because borrowing money becomes more expensive and there’s less cash available.
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2026-05-14 11:52