Long-Term Treasury Yields Rise Amid Shifts in Real Yields, Not Inflation Fears
The 30-year U.S. Treasury yield has risen by about 10 basis points since Federal Reserve Chairman Kevin Warsh's Jackson Hole speech on August 28, 2026, reaching levels near its late-July high of around 5.27%. While inflation concerns and rising oil prices are often cited as the cause for higher yields, much of this recent increase is attributed to a rise in real yields—returns after adjusting for inflation expectations—which have grown despite relatively stable or even slightly lower long-term inflation forecasts. The shift suggests investors are demanding more compensation for locking up capital in long-dated bonds due to factors like stronger growth expectations and increased government borrowing. This trend could tighten financial conditions independently of the Fed's next rate decision, adding pressure on equities as higher rates raise discounting costs for future earnings. Treasury Secretary Scott Bessent has doubled bond buybacks but acknowledged he cannot control equilibrium yield levels.
