Thirty-year US Treasury bond yield climbs past 5.6 percent to reach highest level since 2002

The yield on the 30-year US Treasury bond has climbed above 5.6 percent, reaching its highest level since 2002. According to CNBC - Top News, the 30-year yield touched 5.61 percent and later sat around 5.585 percent. This increase is part of a large selloff in the global Treasury market, driven by worries over inflation and central bank monetary policy. Rising energy prices from the ongoing Middle East conflict are pushing up inflation, leading investors to expect more interest rate hikes from the Federal Reserve. A heavy corporate bond issuance and concerns over growing fiscal deficits and high government debt have also added pressure on the market. Traders are pricing in a more than 72 percent chance of a rate hike at the next Fed meeting in October. Meanwhile, the 10-year Treasury note yield traded at 5.253 percent, and the 2-year Treasury note yield fell to 4.891 percent.

Context

Bond yields rise when bond prices fall, which happens when investors sell off their holdings. Higher yields mean it costs more for governments and companies to borrow money, which can slow down economic growth. Central banks often raise interest rates to cool down inflation when prices rise across the economy.