The 30-Year Treasury Now Out-Yields Dividend Stocks by 2.2 Points. History Says What Followed the Last Time.

The 30-year Treasury yield has surpassed 5.33%, its highest level in 19 years, driven by concerns over inflation and government spending. This has resulted in a 2.2 percentage point gap between the Treasury yield and the yield of the Schwab U.S. Dividend Equity ETF, which stands at 3.1%. According to Motley Fool and Nasdaq Markets, this gap has not been seen since 2007.

The last time the 30-year Treasury yield was this high was in June 2007, when it peaked at 5.35%. Yahoo Finance reports that investors who locked in the long bond's 5.35% yield in June 2007 received exactly that yield for three decades. However, the financial crisis that unfolded soon after led to a collapse in the 30-year yield to 2.69% by the end of 2008.

The current situation presents a choice for income investors, who must weigh the guaranteed 5.33% yield of the 30-year Treasury against the 3.1% yield of the Schwab U.S. Dividend Equity ETF. The ETF, a $109 billion fund holding about 100 dividend-paying stocks, has not seen a yield gap this large since 2007, as reported by Motley Fool and Yahoo Finance.

Brief written by urgent.news from Motley Fool, Nasdaq Markets, Yahoo Finance — 3 reports on this story. Machine-written — may contain errors; check the original before relying on it.