Treasury Yields Top 4.75%, Highest Since January 2025
Treasury Yields Top 4.75%, Highest Since January 2025
The News
A global bond selloff pushed the US 10-year Treasury yield above 4.75% on Monday, its highest level since January 2025, as rising oil prices stoked bets that the Federal Reserve will have to hike interest rates.
The selling did not stop at the water's edge. Japan's 10-year government bond yield touched 3% on Tuesday for the first time since 1996, and Australia's benchmark sovereign yield jumped to a level last seen in 2011.
Reuters reported that renewed fighting in the Middle East drove oil above $91 a barrel, pressuring stocks as yields climbed.
Timeline
The US 10-year yield tops 4.75% for the first time since January 2025, according to Bloomberg — the highest of President Trump's second term, MarketWatch reported, with oil climbing back to about $90 a barrel.
Treasury Secretary Scott Bessent tells The Epoch Times, as the G20 kicks off, that "the U.S. bond market is the most resilient in the world."
Japan's 10-year yield touches 3% for the first time this century, a milestone for a debt market returning to normality after years of borrowing costs near zero. Tokyo's 10-year auction that day draws demand in line with its 12-month average, as high yields pull in buyers.
Australia's benchmark yield hits a 15-year high as traders raise bets that the Reserve Bank may need to hike again soon. Oil crosses $91 a barrel.
Reactions
Bessent struck a confident note, calling the American bond market the world's most resilient. The Financial Times reported he also signaled he expects the Bank of Japan to raise rates soon — a shift that would keep pressure on yields worldwide.
Market commentary was blunter. MarketWatch said the 10-year had crossed a threshold that should make people "sit up and take notice," and argued the yield is breaking out with 5% potentially "just the beginning" — driven by more than the Fed's fight against stubborn inflation.
Bloomberg noted that not since 2006 have yields on the longest-maturity Treasuries been this high for this long, pointing to a gaping budget deficit and another wave of corporate issuance keeping investors wary.
What's Next
Bloomberg flagged a potentially decisive Federal Reserve meeting in the coming weeks as the next major test for the long end of the Treasury curve, alongside the deficit and the corporate borrowing wave.
In Tokyo, investors are positioning for an interest rate hike from the Bank of Japan. In Sydney, traders are pricing the chance the Reserve Bank of Australia hikes again.
More
Higher Treasury yields are not an abstraction: the 10-year is the benchmark that mortgage rates, car loans and corporate borrowing costs key off, and it sets the government's own cost of carrying the debt. A move from near-zero to 3% in Japan, meanwhile, changes the math for Japanese investors who spent years parking money in US bonds for want of yield at home.
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