Long-Term US Treasury Yield Hits Nearly Three-Year High, Inflation Concerns Trigger Global Bond Market Sell-Off

On May 18, investor fears of accelerating inflation triggered a global bond market sell-off, pushing yields on U.S. long-term Treasuries to their highest levels in nearly three years. U.S. President Donald Trump has been pressuring Iran to reach an agreement to avoid a potential military conflict, and this pressure has kept oil prices climbing. As a result, the yield on the 30-year Treasury note rose by 4 basis points to a peak of 5.16% at one point—its highest level since October 2023. The yields on the 10-year and 2-year Treasury notes touched 4.63% and 4.10% respectively, marking their loftiest levels since February 2025. Across the Pacific, Japan’s 30-year Japanese Government Bond (JGB) yield surged 20 basis points to 4.2%, hitting its highest point since the bond’s introduction in 1999. Bond traders frequently view the 5% yield threshold on the U.S. 30-year Treasury as a key "line in the sand"—a level they believe will draw bargain hunters into the market. Gunit Chadha, Head of U.S. Rate Strategy at Farva Bank, noted there is no clear anchor point for yields above 5%, and suggested traders focus on a 5.25% to 5.5% trading range for the U.S. 30-year Treasury.