The US Treasury market, valued at approximately $30 trillion, is bleeding value as the 30-year yield hit 5.281% on July 31, its highest level since 2007. This surge in yields is driven by geopolitical tensions in the Middle East, renewed inflation concerns, and US debt approaching $31.5 trillion, putting pressure on the entire financial system. Foreign buyers are progressively retreating, with their ownership share falling from 33% to 23% over the last decade. As of mid-August, the 10-year yield stood around 4.656% while the 2-year yield was approximately 4.182%, charting a steepening yield curve that suggests higher borrowing costs ahead. The rise in Treasury yields is spreading across the economy, raising the cost of mortgages, car loans, and corporate borrowing while compressing equity valuations, particularly for growth stocks.
Source: Read the original article
