In an indication of potential market turbulence ahead, the yield on 30-year U.S. Treasuries surged to its highest level in over a year, hitting approximately 4.86%. This increase on Monday reflects investor reactions to a new financial landscape under President-elect Donald Trump.
The climb, partly driven by lackluster demand at Treasury auctions and the influx of high-grade corporate bonds, suggests growing caution among traders.
Monday’s session saw yields on long-term U.S. government bonds, such as the 30-year Treasury, rise amid tepid demand from investors. Further contributing to the rise were concerns over supply from imminent auctions of 10- and 30-year Treasuries ahead of the state funeral for former President Jimmy Carter. Market jitters were also fueled by Trump’s denial of a more restrained tariff plan, intensifying fears of potential inflation from trade protectionist measures.
The yield curve revealed signs of strain as longer-dated Treasuries recorded significant increases; the 10-year yield reached 4.64%, the highest since May, marking nearly a 50 basis-point rise since early December. A widening gap between these yields and those on two-year notes underscores market wariness regarding inflationary pressures, heightened by policy shifts anticipated under the forthcoming Trump administration.
