US 30-year Treasury yield hits highest since 2002

{"text":[[{"start":0,"text":"US long-term borrowing costs climbed to their highest level in almost a quarter of a century on Tuesday as a recent sell-off in the Treasury market deepened."}],[{"start":16.35,"text":"The yield on the 30-year US Treasury rose 0.06 percentage points in afternoon trading in New York to 5.62 per cent, its highest level since June 2002."}],[{"start":25.79,"text":"The 10-year Treasury yield rose as much as 0.05 percentage points to 5.29 per cent, pushing benchmark borrowing costs in the US to another post-2007 high. Bond yields rise if prices fall."}],[{"start":39.033,"text":"A brutal sell-off in bond markets has gathered momentum in recent weeks as surging oil prices fuel inflation and strong US economic data bolster bets on further interest rate rises from the Federal Reserve. Efforts by Treasury secretary Scott Bessent to rein in the sell-off have fallen flat, with the 30-year yield rising from 5.2 per cent in mid-August when he announced an expanded programme of long-term bond buybacks."}],[{"start":62.52,"text":"“The path of least resistance appears for the term premium to blow out further,” said Arun Sai, a multi-asset strategist at Pictet Asset Management, referring to the extra yield investors demand to hold longer-term debt. “Investors are in no hurry to add duration,” he added."}],[{"start":null,"text":"

"}],[{"start":78.486,"text":"Kristina Hooper, chief market strategist at Man Group, said that rising yields in long-dated bonds are a reflection of “increasing concern about fiscal sustainability” as well as the higher inflation caused by the energy crisis sparked by the US-Iran war."}],[{"start":94.084,"text":"The US national debt passed $40tn last month, while government borrowing continues to rise at a historic pace, fuelling investors’ fears about the trajectory of the country’s public finances."}],[{"start":103.35,"text":"Hooper said that “US Treasuries’ attractiveness to investors, especially foreign buyers, will diminish given the US’s fiscal path” and the “unpredictability” of Washington’s foreign policy."}],[{"start":114.579,"text":"Laura Cooper, head of macro credit at Nuveen, said that “the long end has little protection against another bout of turbulence” given that “near-term inflation risks [are] still tilted higher as energy prices remain elevated”. She said that while she had “trimmed” her underweight position in long-dated Treasuries, she was “not yet buying the dip”."}],[{"start":133.607,"text":"The price of the global oil benchmark Brent crude has been more than $100 a barrel for much of September. The contract settled 2.6 per cent lower at $102.59 a barrel on Tuesday."}],[{"start":145.225,"text":"The soaring price of oil this year has prompted investors to dump their bets that central banks globally will cut interest rates, instead moving to price in higher rates. The US Federal Reserve raised interest rates for the first time since 2023 this month, and investors in futures markets are now pricing four more quarter-point rises over the next year."}],[{"start":165.67,"text":"Despite the sell-off in bonds that this has caused, traditionally riskier assets such as stocks and corporate credit have so far stayed relatively resilient."}],[{"start":175.593,"text":"The S&P 500 closed 0.2 per cent lower on Tuesday and remains less than 2 per cent below its all-time high from August. The Nasdaq 100 gained 0.2 per cent."}],[{"start":186.8,"text":"Nuveen’s Cooper said that the “strong growth backdrop, powered in part by AI investment, has kept risk assets steady”."}],[{"start":198.56,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1790727152_8431.mp3"}