US long-term borrowing costs hit 2004 high, Treasury market rattles

US long-term borrowing costs surge to 2004 peak

The latest Treasury auction data shows US long-term borrowing costs have risen to their highest level since 2004, a signal that market participants are demanding steeper yields amid fiscal strain. The 10‑year Treasury yield now sits at ↓ 4.78%, up from just under 4% a month ago, while the 30‑year benchmark crossed ↓ 5.2%. Analysts at Reuters warn that the surge could force the Treasury to issue debt at a higher cost, tightening the federal budget. Higher borrowing costs translate into larger interest outlays, a dynamic that already pressured the deficit after the pandemic fiscal response. Bloomberg notes that the yield curve steepening reflects investor anxiety over the debt ceiling and upcoming policy debates.

“If rates stay elevated, the Treasury’s financing bill could swell by hundreds of billions,” a senior economist told Bloomberg.

The fiscal outlook now hinges on congressional action, with potential repercussions for global capital markets.