U.S. Treasury yields continue to hit multi-decade highs as the bond market rout worsens.
Owing to a global bond selloff, the 10-year Treasury yield has now risen to 5.3338%, its highest level since April 2002. The yield rose four basis points on Sept. 30.
The yield on the 10-year Treasury impacts interest rates for mortgage borrowing, automotive loans, and credit card debt in the U.S.
The average interest rate charged on a home mortgage in the U.S. recently topped 7%.
The yield on the 30-year Treasury bond has reached 5.6702%, its highest level since July 2002. Yields and prices move inversely to each other and one basis point equals 0.01%.
Rising Treasury yields signal weak demand for U.S. government bonds, or debt issuance, and declining prices as a result. As prices fall, the yield or interest on the bonds rises.
The lack of demand for U.S. Treasury bonds comes amid growing concerns over a lack of political action to tackle fiscal deficits, as well as sticky inflation in America.
However, bond yields are also rising outside of the U.S. Japan’s 10-year government bond yield was last seen at 3.126%, its highest level in 30 years.
In Germany, the yield on the German 10-year bund, the benchmark for the European Union (EU), also rose four basis points on Sept. 30 to hit 3.6179%, its highest level since 2008.
Analysts say that bonds are also moving in lockstep with crude oil prices, which have been turbulent amid the ongoing war between the U.S. and Iran.
Brent crude oil, the international standard, is trading right around $100 U.S. a barrel on Oct. 1.
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