Investor concerns about rising inflation – caused by war in the Middle East – led to a sell-off in global debt markets. The interest rate on 30-year U.S. Treasuries rose to 5.18% on Tuesday, a level last seen on the brink of the 2007 global financial crisis.
Yields on US Treasury bonds with other maturities are also rising. The increase in the yield of treasury bonds (which means a decline in their prices) is the result of the situation on world markets after the attack by the United States and Israel on Iran.
Treasury bond yields are rising
Investors expect higher compensation for holding longer-term debt due to concerns about rising energy prices and the budget deficit.
“Given that debt is growing faster than economic growth, deteriorating inflation and the lack of political will to pursue fiscal reforms, there is no reason to pursue long-term solutions,” Ajay Rajadhyaksha, global president of research at Barclays Plc., wrote in a note on Monday, quoted by Bloomberg.
A new era on the treasury bond market?
The recent rise in long-term borrowing costs potentially signals a new era for the $31 trillion government bond market, which has a huge impact on borrowing costs around the world, notes Bloomberg.
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The United States is not alone in this – for example, the yield on British government bonds is approaching 6%.
The depreciation of treasury bonds also affected the so-called base markets, i.e. major countries such as the USA or Germany.
Wild swings in U.S. bond yields often reverberate across global financial markets. If the selloff continues, higher yields could push up U.S. mortgage and corporate rates, threatening to slow the world's largest economy, Bloomberg writes.
See also: Market return. Is the worst-case scenario of interest rates becoming a thing of the past?
Polish treasury bonds
The situation on global markets, caused by concerns about the effects of the war in Iran, also affects Polish treasury bonds. Their profitability exceeded the symbolic threshold of 6%. and climbed to its highest level since mid-January 2025.
However, at that time the level of interest rates – which is one of the main determinants of the profitability of treasury securities – was 5.75 percent, i.e. 2 percentage points higher. higher than currently.
Source: Bloomberg
