U.S. Treasury yields extended their climb on Thursday, with the 30-year bond rate reaching roughly 5.34%—its highest level since 2007—as a global bond selloff intensified. The surge followed an initial dip after Treasury Secretary Scott Bessent announced plans to double the size of buyback operations for 10- to 30-year Treasuries to at least $4 billion per auction, effective Wednesday.
Total U.S. debt surpassed $40 trillion for the first time this week, while annual interest payments on federal obligations pushed above $1 trillion. The monthly budget deficit in July hit $432 billion, the largest since March 2021, reflecting elevated spending and weaker revenue. The debt-to-GDP ratio stands near 120%, up from roughly 102% in 2017 and below the 126% peak during the COVID-19 pandemic in 2020.
Geopolitical tensions and energy market disruptions compounded the selloff. Crude oil prices climbed back above $93 a barrel, with a prior intraday wartime high of $126 per barrel. The U.S. diesel crack spread—measuring the premium of diesel futures over WTI crude—exceeded $100 per barrel for the first time on Monday, signaling tight refined product supplies amid damaged Gulf and Russian refineries.
Global equities remained under pressure, with U.S. tech stocks weighed down by chipmakers. Walmart’s rare earnings miss on Thursday underscored concerns about consumer resilience. In China, humanoid robot maker Unitree’s shares surged nearly sixfold on its Shanghai exchange debut, while Moderna’s stock nearly tripled after a cancer vaccine collaboration with Merck.
The Federal Reserve’s annual symposium in Jackson Hole, Wyoming, begins next week, with minutes from the July meeting showing a hawkish tilt and a 6-3 split in policy views. Upcoming July PCE inflation data and potential sanctions on Tehran by Treasury Secretary Bessent could further influence rate expectations ahead of the September policy meeting.
