Rising Fiscal Risks and Moody’s Downgrade Push U.S. 30-Year Treasury Yield Past 5%

U.S. 30-Year Treasury Yield Tops 5% as Moody’s Downgrade Stokes Debt Concerns

The yield on the U.S. 30-year Treasury note climbed above 5% for the first time since April, reaching an intraday high of 5.011%, fueled by Moody’s recent credit rating downgrade and growing fiscal challenges.

This spike marks a return to levels last seen during the “tariff tantrum” in April, which triggered sharp declines in equities and cryptocurrencies alike. At that time, Bitcoin was near a local low around $75,000 but has since surged to roughly $103,000, hitting highs above $106,000 on Sunday.

Jim Bianco, head of Bianco Research, noted that the last close at or above 5% occurred in October 2023, with yields nearing a peak not seen since 2007.

Meanwhile, the UK overtook China as the second-largest foreign holder of U.S. Treasuries in March, holding $779.3 billion, just behind Japan.

Both China and Japan have trimmed their Treasury holdings over the past year, increasing pressure on U.S. debt sales.

With the U.S. facing rising deficits and issuing more debt, bond yields are climbing amid falling prices. This has contributed to a risk-off mood, with Nasdaq futures sliding about 2%.