US Bonds Plunge: 30-Year Yields Hit 5% - Markets on High Alert!

New York – A historic sell-off in US Treasury bonds has driven 30-year yields to 5%, marking their highest level since 2007. This surge signals growing investor concerns about the US economy's stability.

Credit Downgrade and Deficit Worries

Rating agency Moody's recently revised the US credit outlook to "negative" while maintaining its Aa1 long-term rating. The agency warned that "political polarization and fiscal indiscipline" are undermining debt sustainability.

Meanwhile, the US budget deficit, now exceeding 6% of GDP, is amplifying fears. With the Fed maintaining high interest rates, rising borrowing costs could further strain public finances.

Market Alarm: "Safe Haven" Status Under Threat

Traditionally seen as a global safe haven, US Treasuries are losing appeal due to:

• Political uncertainty (pre-2024 election budget battles),

• The Fed's prolonged high-rate policy,

• Surging public debt,
  which are rapidly eroding investor demand.

Global Ripple Effects: Stocks and Dollar at Risk

The yield surge could:

• Increase financing costs for equity markets,

• Make mortgages and corporate loans more expensive,

• Trigger dollar depreciation, potentially fueling inflation.

Goldman Sachs analysts warn: "This yield movement reflects structural confidence issues. Without debt control, bond market volatility could worsen."

Next Steps: Fed and Treasury in Focus

Markets now await:

• Fed Chair Jerome Powell's policy guidance,

• The Treasury's borrowing strategy adjustments.
  If yields keep rising, debates about a US debt crisis may dominate global discourse.

Bottom Line: This bond crash isn’t just about rates—it’s the cost of Washington’s fiscal laxity. Investors are confronting unprecedented doubts about the world’s largest economy’s creditworthiness.