US sells 30-year bonds at highest yield since 2001 amid inflation concerns
Treasury auctions $25 billion in long-term debt at 5.23% yield as investor demand weakens and deficit pressures mount.
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What to know
- The Treasury sold $25 billion in 30-year bonds at 5.23% yield on August 13—the highest borrowing cost since 2001—reflecting a historic selloff in long-dated securities.
- Investor demand remained weak even at multi-decade high yields, signaling market concern that the bond selloff is not over and raising questions about structural demand for US long-term debt.
- The high borrowing costs and deficit pressures pose a political challenge for Trump and Treasury Secretary Bessent ahead of November midterm elections, with interest on public debt already driving a $1.17 trillion fiscal year deficit increase.
How it unfolded
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Patrick McHenry, former Republican congressman and ex-House Financial Services Committee chairman, characterized the 30-year bond sale as a warning signal about US government debt and deficit levels, calling for government action on overspending.
“Thursday's bond sale is a 'wake up sign' for the country on government debt and deficit.”
Patrick McHenry, former House Financial Services Committee chairman · Newswires ↗ -
Press coverage noted that the high borrowing costs and weak investor demand for US debt pose a headache for President Trump and Treasury Secretary Bessent ahead of November midterm elections, as elevated government financing costs feed into the broader economy.
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BTG Pactual's John Fath warned that the lack of investor enthusiasm at multi-decade high yields is troubling, noting that Treasury Secretary Bessent may attempt to address the situation by reducing long bond supply, though existing debt levels mean price action reflects new sellers rather than just new supply.
“We're not really at a level where people seem to be going crazy, saying 'I want to buy the 30-year,' and that should be a warning.”
John Fath, BTG Pactual Asset Management · Newswires ↗ -
The 30-year bond auction cleared without difficulty, but investor demand remained weak. Industry analysts noted that the successful clearing should not be confused with strong structural demand for long-duration assets, signaling investor concern that the selloff may not be over.
“We expect today's 30-year auction to clear without difficulty, but a successful auction shouldn't be confused with strong structural demand for long-duration assets.”
Michal Stanczyk, Allspring Global Investments · Newswires ↗ -
The US government announced plans to sell $25 billion in 30-year bonds at an auction later that day, with a projected yield of around 5.23%—the highest borrowing cost for this maturity in a quarter of a century.
What people are saying verbatim
“We're not really at a level where people seem to be going crazy, saying 'I want to buy the 30-year,' and that should be a warning.”
John Fath, Managing Partner, BTG Pactual Asset Management · Fortune ↗
“Bessent may try to address it by decreasing supply, but there's already a lot of 30-year paper issued, so it's not necessarily just new supply driving price action. It's new sellers.”
John Fath, Managing Partner, BTG Pactual Asset Management · Fortune ↗
“We expect today's 30-year auction to clear without difficulty, but a successful auction shouldn't be confused with strong structural demand for long-duration assets.”
Michal Stanczyk, Portfolio Manager, Allspring Global Investments · Fortune ↗
“It's a headache for President Donald Trump and Treasury Secretary Scott Bessent ahead of midterm elections in November.”
Bloomberg, News outlet · Bloomberg ↗
“Thursday's bond sale is a 'wake up sign' for the country on government debt and deficit.”
Patrick McHenry, Former House Financial Services Committee chairman · Bloomberg ↗