U.S. 30-Year Treasury Yield Reaches Highest Level Since 2007

U.S. 2 percent on May 19, the highest level since 2007. Bond yields rise when bond prices fall, and investors have sold bonds of all durations because higher inflation reduces the value of fixed payments. Inflation has increased since the start of the Iran war, raising prices for energy and goods that require transportation. The higher yield does not directly affect most consumer borrowing rates.

Mortgage rates are based on the 10-year Treasury note because most mortgages are held for six or seven years. Credit cards and similar products use short-term rates.

U.S. economist at GlobalData, said long-term investors such as pension funds may shift toward the 30-year bond to lock in higher returns. Those investors may sell stocks to raise cash for the purchases. U.S. stocks have faced pressure in recent days as yields rose. Governments at all levels will pay higher interest costs on new borrowing, increasing expenses for taxpayers.