The yield on the U.S. 30-year Treasury notes exceeded 5% for the first time since early April, reaching an intraday peak of 5.011%. This increase follows Moody’s recent downgrade of U.S. credit, which stripped the nation of its Aaa rating due to growing deficits and climbing interest charges.

Previously, this yield last touched 5% on April 9, amid what was referred to as the “tariff tantrum,” which led to significant sell-offs in both crypto and U.S. stock markets.

Key Points:

• The U.S. 30-year Treasury yield climbed above 5% for the first time since April.
• The UK has surpassed China as the second-largest foreign holder of U.S. Treasuries.

Both China and Japan have steadily diminished their U.S. Treasury holdings in the past year, emphasizing the increasing need for the U.S. to attract new debt buyers. With the Treasury facing expanding deficits and the potential for issuing more bonds, yields could continue to climb while prices decline. On another note, Nasdaq futures are down about 2%, mirroring a broader risk-averse sentiment in the market.

“The last time the 30-year closed above 5% was October 31, 2023. The highest recent yield was 5.11% on October 19, 2023, the peak since July 2007,”

• Jim Bianco, Bianco Research

Additionally, the United Kingdom overtook China in March as the second-largest foreign holder of U.S. Treasuries, boasting $779.3 billion in holdings, trailing only Japan. Both Asian countries are releasing their U.S. Treasury assets, making it harder for the U.S. to find new investors for its debt.