30-year Treasury yield tops 5.31%, the highest in 19 years

JUST IN: The 30-year US Treasury yield tops 5.31%, its highest level in 19 years, amid worries over persistent inflation and government borrowing.

The 30-year Treasury yield just hit 5.31%, its highest since 2007.

That's the number the US government pays to borrow for three decades, and it hasn't been this expensive in nineteen years. Traders spent the day watching it climb, and here's the strange part. The soft data said yields should be falling. Retail sales dropped 0.6% last month, producer prices came in flat, and long-end yields went up anyway. Barclays counted three separate releases arguing for lower rates this month. The market ignored all of them.

So what's actually driving this? Oil above 84 dollars as the Iran deadline expires, sure. But the bigger story is the deficit, which just posted its worst month in over five years, with interest on the debt itself now a major cost. And all of it lands at the Federal Reserve's door, with meeting minutes due Wednesday.

When bond investors stop pricing inflation and start pricing whether the borrower is good for it, that's a different conversation entirely.

This is Sara White, reporting for HIT.

Source Read the original reporting at cnbc.com