Global bond rout rolls on, pushes 30-year US Treasury yields to highest since 2004

US 30-year borrowing costs reached a record high of just over 5.44% on Thursday, marking their highest level in over 20 years, according to wire material. This surge in yields came as investors demanded higher compensation to hold bonds, given the strong economic growth and high energy prices. The jump in global bond yields occurred after business activity data indicated robust US growth and rising inflation pressures, fueling concerns about the Federal Reserve's rate-hike plans.

Despite the multi-decade highs in yields, investors have largely absorbed the increase, citing the resilience of economic growth, strong corporate profits, and significant spending on AI development. Experts have noted that while higher yields signal higher costs for US mortgages and the federal government's debt interest burden, the situation appears orderly and not overly dramatic at this stage.

The 30-year yield reflects investors' willingness to finance government borrowing in the years ahead, which is expected to reach a record €525.5 billion in 2026 due to rising refinancing needs and growing special fund requirements. Meanwhile, Japan's 10-year bond yield hit its highest level since 1996. US Treasury Secretary Scott Bessent has attempted to mitigate rising borrowing costs through various measures, but the US already has some of the highest yields among Group of Seven richest nations.