30-Year Treasury Yield Hits Highest Level Since 2004

A global bond rout pushed the 30-year Treasury yield to its highest since 2004 and the 10-year to a 19-year high, fueling rate-hike bets.

Treasury yields climbed to multidecade highs on Thursday as investors bet on another Federal Reserve rate hike. The 30-year Treasury bond yield rose more than 3 basis points to 5.435%, after touching a peak around 5.44% that CNBC reports is the highest since 2004. The benchmark 10-year yield climbed to 5.133%, its highest level since July 2007, while the 2-year note fell slightly to around 4.879%, remaining near a 2023 high. The moves built on Wednesday's rout, when the 10-year yield posted its biggest one-day jump since April 7, 2025.

TradingView reports that Wednesday's selloff was set off by a combination of pressures: WTI crude oil rose more than 1%, lifting inflation expectations, while the September S&P US manufacturing PMI unexpectedly rose 3.1 points to 57.0 — the fastest expansion in 4.25 years — versus expectations of a decline to 53.7. Hawkish commentary from Fed Governor Michael Barr added fuel; he said that "further policy adjustments by the Fed are likely to be needed to ensure inflation comes down to target." A weak Treasury auction compounded the damage: demand for the $70 billion 5-year note sale produced a 2.21 bid-to-cover ratio, well below the 10-auction average of 2.34 and the lowest in 7.75 years, per TradingView.

The repricing has been dramatic. Markets now price in more than a 75% chance of a 25-basis-point Fed hike at the October 27-28 FOMC meeting, according to CNBC, citing CME Group's FedWatch tool — up from roughly 49% just a week earlier; TradingView put the odds at 69% versus 53% on Tuesday. Fed officials have reinforced the hawkish tone: CNBC reports New York Fed President John Williams said it would be "reasonable" to expect another hike by year-end. Pressure is global too — Japan's 10-year JGB yield reached its highest since August 1996, and the 10-year German bund yield rose 9.2 basis points to 3.555% while the 10-year UK gilt yield rose 10.8 basis points to 5.347%, per TradingView.

The equity impact was immediate. The S&P 500 (SPY) closed down 0.75% Wednesday, the Dow (DIA) fell 0.68% and the Nasdaq 100 (QQQ) lost 0.85%, with chipmakers and AI-infrastructure names giving back part of Tuesday's record-setting gains — Broadcom and Micron each dropped more than 2%, per TradingView. Rate-sensitive sectors bore the brunt: homebuilders DR Horton, Pulte Group and KB Home all fell more than 2% as the average 30-year fixed mortgage rate climbed 15 basis points to 7.12%, a 2.25-year high. Airlines and cruise lines slid on higher fuel costs, while energy names such as APA Corp and ConocoPhillips gained. With markets pricing in four rate hikes through next year, CNBC quotes Madison Investments' Mike Sanders warning that the Fed is being pushed toward tighter policy "at a time when the risk of a policy mistake is rising."