US 30-year yield tops 5% as Moody’s cuts credit rating

The U.S. 30-year Treasury yield surged past 5%, driven by a credit downgrade, fiscal worries, and fading global demand.

The yield on the U.S. 30-year Treasury bond climbed above 5%—reaching 5.011% intraday—for the first time since April, signaling deepening concerns over America’s fiscal health. Moody’s recent downgrade of the U.S. credit rating removed its Aaa status, citing large deficits and rising interest costs.

The last time this part of the yield curve reached such a level was on April 9, during the "tariff tantrum"—a period marked by aggressive market sell-offs across stocks and cryptocurrencies. Back then, Bitcoin had dropped to a local low near $75,000, but it has since rallied to around $103,000 after peaking at $106,000 over the weekend.

Market expert Jim Bianco pointed out that the last time the 30-year yield closed at or above 5% was on October 31, 2023. That was just shy of the highest recent close—5.11% on October 19, a level not seen since 2007.

Adding to the pressure, foreign appetite for U.S. debt is fading. The U.K. has now overtaken China as the second-largest foreign holder of Treasuries, with $779.3 billion, behind only Japan. Both China and Japan have been steadily reducing their holdings, increasing the urgency for the U.S. to find alternative debt buyers.

As more bonds are issued to cover budget shortfalls, the increase in supply is pushing yields up and prices down. Meanwhile, the broader markets are reacting nervously—Nasdaq futures dropped around 2%, reflecting a growing shift toward risk aversion.