Inflation concerns reignite, triggering global bond market sell-off, pushing 30-year US Treasury yield to near 19-year highs.

Against the backdrop of growing concerns in the market about a resurgence of inflation, U.S. Treasury bonds faced a new round of selling on Tuesday, pushing up long-term bond yields further. The 30-year Treasury bond yield rose to its highest level in nearly 19 years. On Tuesday, the 30-year U.S. Treasury bond yield briefly rose to 5.197%, the highest level since July 2007, before falling back to around 5.183%, still rising by over 3 basis points during the day. At the same time, the 10-year U.S. Treasury bond yield, considered an important benchmark for mortgage, car loan, and credit card rates, rose by 4 basis points to 4.667%, touching 4.687% at one point, reaching a new high since January 2025. The 2-year U.S. Treasury bond yield, which is more sensitive to expectations of short-term interest rates by the Federal Reserve, rose by about 3 basis points to 4.12%. Market participants pointed out that higher-than-expected inflation data released last week served as a significant trigger for the current bond market selloff. With the ongoing tensions in Iran pushing up international oil prices, the market is concerned that the rising energy costs will exacerbate inflationary pressures in the U.S. This shift has also led traders to start betting that the Fed's next move may not be a rate cut, but rather a rate hike. Jim Lacamp, Senior Vice President of Wealth Management at Morgan Stanley, said, "This is definitely a big problem. Earlier this year, the market generally expected interest rates to go down, which was one of the key reasons for the bullish outlook on U.S. stocks at that time. But now, the market seems to be preparing for a hike." Analysts pointed out that persistently high borrowing costs may further suppress consumer spending, and higher long-term rates could also weigh on economic growth and exert pressure on the current overvalued U.S. stocks. Ian Lyngen, head of U.S. rate strategy at BMO, warned that if the 30-year Treasury bond yield rises to 5.25% in the coming weeks, stock valuations may face a "more prolonged pullback." Affected by the continuous rise in bond yields, U.S. stocks fell for the third consecutive trading day on Tuesday. The S&P 500 index fell 0.67% to 7353.61 points; the Nasdaq Composite Index dropped 0.84% to 25870.71 points; and the Dow Jones Industrial Average fell 322.24 points, a decline of 0.65%, closing at 49363.88 points. Meanwhile, global long-term bond yields also remained high. The 30-year German government bond yield rose to 3.684%; the 30-year UK government bond yield was at 5.773%; and the 30-year Japanese government bond yield also hit a historical high this week. In addition, a survey released by a U.S. bank on Tuesday showed that 62% of global fund managers expect the 30-year U.S. Treasury bond yield to rise to 6% in the future, which would be the highest level since 1999. In contrast, only 20% of respondents expect the yield to fall back to 4%.