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Global bond yields surge as oil, debt fears push 30-year to 5.33%
30-year US yields hit 5.33%, highest since 2007, as Brent crude tops $90, AI debt loads grow, and government spending fears compound inflation risks.
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Long-term borrowing costs across some of the world’s largest economies hit multi-year highs on Tuesday as inflation concerns, rising oil prices, and uncertainty over government spending on AI pushed bond yields higher.
The interest rate on 30-year U.S. Treasury debt touched 5.33%, the highest level since June 2007. The equivalent UK gilt yield reached 5.85%, while yields in Germany and Japan also moved higher. Bond yields – the interest rate governments pay to borrow – directly influence the cost of mortgages, car loans, and corporate debt.
A barrel of Brent crude surpassed $90 on Tuesday, driven by escalating tensions in the Middle East. President Donald Trump threatened to bomb Oman if the U.S. ally interfered with negotiations to reopen the Strait of Hormuz. The waterway has been largely closed for almost six months due to the U.S.-Israel conflict with Iran, disrupting global oil supplies.
John Canavan, lead analyst at Oxford Economics, told the BBC that rising oil prices, high government debt levels, and the sheer scale of AI investment – with uncertain payback timelines – were all putting upward pressure on borrowing costs. “It adds to the overall inflationary impact,” Canavan said. Higher yields mean companies pay more to borrow, costs that often get passed to consumers, he added.