US 30-year yield tops 5% since 2007

The U.S. Treasury sold $25 billion of 30-year bonds on May 13 at a 5.046% high yield, the first time a 30-year auction cleared above 5% since 2007, according to Treasury auction results. Federal Reserve data released on May 14 showed the 30-year constant-maturity yield at 5.03% for May 13, with the 10-year yield at 4.46%. The move came as investors absorbed hotter April inflation readings and as Kevin Warsh was confirmed on May 13 to succeed Jerome Powell as Federal Reserve chair. (federalreserve.gov) (fred.stlouisfed.org) ### Which number made this move stand out? The 5.046% auction yield was the clearest marker. TreasuryDirect’s May 13 auction results for the new 30-year bond, CUSIP 912810UU0, showed a 5% coupon, a 5.046% high yield and a price of 99.292811 per $100 of face value. TreasuryDirect’s results page separately listed the security as a 30-year bond issued May 15, 2026. The 5.03% reading on the Fed’s H.15 release captured the broader market move. (treasurydirect.gov) FRED, which republishes the Fed’s series, showed the 30-year constant-maturity yield at 5.03% on May 13 and identified May 15 as the next release date. ### Why were Treasury yields rising in the first place? April inflation data pushed yields higher before the bond sale. CNBC reported that the 10-year Treasury yield rose as much as 3 basis points to 4.49% on May 13 after a hotter-than-expected producer price report, while the 30-year yield traded as high as 5.05%. (treasurydirect.gov) The producer price index rose 1.4% in April from the prior month and 6% from a year earlier, CNBC reported, citing Bureau of Labor Statistics data. (federalreserve.gov) Clark Bellin, president and chief investment officer at Bellwether Wealth, said producers were feeling the effects of $100-per-barrel oil and that the Federal Reserve had “an inflation problem on its hands.” ### What did the auction say about demand? Treasury’s auction statistics showed a bid-to-cover ratio of 2.30, with 72.06% of bids at the high yield accepted. (cnbc.com) Indirect bidders took $16.61 billion of the competitive awards, direct bidders took $5.42 billion and primary dealers took $2.91 billion. Bloomberg reported that the result came in slightly above the yield seen in trading immediately before the auction and described demand as middling. (cnbc.com) That framing matched the small “tail” of about half a basis point reported in market summaries after the sale. ### Where does Kevin Warsh fit into this story? The U.S. Senate confirmed Kevin Warsh on May 13 as the next chair of the Federal Reserve, according to Associated Press reporting carried by the St. (treasurydirect.gov) Paul Pioneer Press. JPMorgan Chase said Warsh’s term officially begins when Jerome Powell’s term expires on May 15. Euronews reported that the 30-year sale landed only hours after Warsh’s confirmation. The outlet said the auction underscored the pressure facing policymakers as inflation rose and long-term borrowing costs climbed. (bloomberg.com) ### Did yields keep climbing after the sale? May 14 trading showed some stabilization in the 10-year benchmark while long rates stayed elevated. Euronews reported that the 30-year bond was trading around 5.02% and the 10-year note around 4.44% on Thursday. (twincities.com) TradingEconomics and Investing.com both showed the 10-year yield around 4.49% on May 14 after touching that level earlier. The Fed’s May 14 H.15 release, which reports through May 13, did not yet capture a full May 14 close. (euronews.com) The next official daily update is scheduled for May 15, according to FRED. ### What should readers watch next? May 15 is the issue date for the new 30-year bond sold this week, according to Treasury auction results. TreasuryDirect’s auction pages also list the government’s upcoming auctions, while the Federal Reserve’s H.15 release is updated each business day at 4:15 p.m. (euronews.com) Eastern. (treasurydirect.gov) (federalreserve.gov)