US auctioned $25B 30-year bonds at 5.23%, highest since 2001
The US just auctioned $25 billion in 30-year bonds at a whopping 5.23% yield, the highest since 2001.
This jump is mostly about rising government debt, stubborn inflation, and the growing supply of long-term bonds.
High energy prices and big fiscal deficits are making people expect interest rates to stay up for a while.
Deficit $1.17T, US Treasury eyes short-term
With the budget deficit climbing to $1.17 trillion (up 15% from last year), Treasury officials are hinting they might switch things up, maybe issuing fewer long-term bonds and focusing more on short-term notes to manage costs.
But analysts say demand for these longer bonds is dropping, which could keep borrowing rates high for years.
Plus, the Federal Reserve's fight against inflation with rate hikes isn't helping lower costs anytime soon.