30-Year Treasury Yield Hits 5.19% as Bond Bloodbath Worsens

The 30-year Treasury yield surged to 5.19%, the highest since June 2007, rising 23 basis points in seven trading days. The 10-year yield hit 4.67%, up 29 basis points over the same period. A trifecta of surging inflation, a lax Federal Reserve, and a flood of new debt has spooked the bond market. The Fed's rate cuts have been ignored, with the spread between the 30-year yield and the effective federal funds rate now at 156 basis points. At recent auctions, the Treasury sold $31 billion of 30-year bonds at 5.046% and $52 billion of 10-year notes at 4.468%, both now underwater. Mortgage rates rose to 6.75%, according to Mortgage News Daily, dashing hopes for sub-5% rates. Fannie Mae and Freddie Mac's MBS buybacks have narrowed spreads but turned them into net sellers of Treasuries, pushing yields higher. Wolf Richter argues the Fed must hike rates and stop 'looking through' inflation.