US 30-Year Bond Yield Surges to 19-Year High

The yield on the 30-year US Treasury bond surged to above 5.2%, the highest since 2007, to reflect concerns of higher inflation in the longer term.

The Federal Reserve held rates unchanged in its July meeting, aligned with the consensus, despite rate futures showing that one third of the market was positioned for a hike.

The rise for the 30-year tenure led the movements among Treasuries following controversial statements by Fed Chairman Warsh during the press conference.

The reluctance to signal a rate hike as the Fed's preferred response to inflation drove long-dated yields to surge, even though those on shorter maturities fell.

The Chair also signaled a positive response in seeing long-term yields rise in Q2, akin to a policy tool, also limiting the urge for a rate hike.

Underlying inflation gauges in the US flared higher in Q2 after tariffs and soaring energy prices lifted costs among various industries in the second quarter.