The United States, with a national debt of $40 trillion... 30-year Treasury bond rate hits 5.22%, the highest in 25 years.

The 30-year U.S. Treasury bond interest rate has been set at 5.22%, marking the highest level in 25 years. The decision came after a 250 billion dollar (35.4 trillion won) 30-year bond issuance auction by the U.S. Treasury Department on the 13th (local time). This is the highest yield level in 25 years, following a 30-year suspension of bond issuance by the U.S. over the past 5 years.

The current interest rate of 5.22% is 0.16 percentage points higher than the previous month's rate of 5.06%, and 0.31 percentage points higher than the rate of 4.91% in January last year, just before Donald Trump took office. The bidding participation rate was 2.39 times, higher than the average of the previous six auctions. On the previous day, the 10-year bond issuance rate was 4.69%, the highest in 2007.

The rise in 30-year Treasury bond interest rates is attributed to growing concerns about the growing national debt and rising inflation. Financial Times (FT) noted that with the U.S. national debt nearing 40 trillion dollars, investors are demanding higher interest rates for long-term bonds due to ongoing factors such as the Iran war, tariffs, and AI infrastructure investment, which are putting upward pressure on inflation.

The United States' debt-to-GDP ratio, which crossed the 100% threshold for the first time since the end of World War II in the last quarter of 2020, is expected to exceed 106% by 2030 according to the Congressional Budget Office (CBO). The ongoing Iran war and rising oil prices have contributed to the surge in consumer prices and inflation, which hit a 4.2% rate in May, its highest since 3 years ago.

TD Securities' Ganadi Goldberg, the U.S. interest rate strategy executive, said that ultimately this becomes a problem for the Treasury Department, which needs to finance government spending at higher interest rates.