The US government has incurred its highest borrowing costs in 25 years to sell long-term bonds. An auction of $25bn of 30-year US Treasury bonds on Thursday resulted in a yield, or interest rate, of 5.216%, marking the highest since 2001.
This increase in borrowing costs reflects investors' demand for a higher premium to take on long-duration US debt. Concerns over persistent inflation and the nation's growing debt are reportedly driving this demand.
Michal Stanczyk, a portfolio manager at AllspringGlobalInvestments, noted that investors are being asked to absorb a growing supply of government debt globally amidst large deficits and ongoing inflation uncertainty. Gennadiy Goldberg, head of US rates strategy at TD Securities, described the rise in US borrowing costs as "problematic" for the Trump Treasury, stating they "have to fund the government at more expensive levels."