Fiscal Concerns Drive U.S. 30-Year Treasury Yield Above 5% After Moody’s Lowers Credit Rating

U.S. 30-Year Treasury Yield Tops 5% Amid Moody’s Downgrade and Debt Concerns

Investor anxiety grows as the yield on the 30-year U.S. Treasury bond surpasses 5%, reflecting mounting worries over the nation’s fiscal health and Moody’s recent credit rating cut.

On Monday, the long-term Treasury yield hit an intraday high of 5.011%, marking the first time since April that it has breached this key psychological barrier. Moody’s downgrade of the U.S. credit rating from Aaa to Aa1—prompted by rising deficits and swelling interest payments—has intensified market unease.

This level was last seen during April’s “tariff tantrum,” which sparked sharp sell-offs in both the cryptocurrency and equity markets.

At that time, Bitcoin (BTC) lingered near a low of around $75,000 but has since staged a strong recovery, trading close to $103,000 with a recent peak near $106,000.

Jim Bianco, president of Bianco Research, noted: “The last close of the 30-year yield at or above 5% was October 31, 2023, with the highest close being 5.11% on October 19, 2023—the highest level since July 2007. Today’s yield edges closer to that milestone.”

Meanwhile, the UK has become the second-largest foreign holder of U.S. Treasuries as of March, surpassing China with holdings totaling $779.3 billion, second only to Japan.

China and Japan have both been reducing their Treasury holdings over the past year, raising concerns about the U.S. Treasury’s ability to attract sufficient demand for its growing debt issuance.

The expanding deficits are leading to increased bond supply, which pushes yields higher and bond prices lower. Reflecting broader market jitters, Nasdaq futures fell roughly 2% amid the risk-off sentiment.