Global Bond Rout: 30-Year U.S. Treasury Pierces 5% for First Time Since 2007

Big yield spikes tied to energy shocks are rare but consequential: after the 1973 oil embargo, 10-year U.S. yields jumped from 6.4% to 7.8% within six months, presaging a decade-long inflation fight; in June 2007, the 10-year briefly breached 5.2% just before the sub-prime collapse. Today’s move reflects three structural forces—1) an external supply shock (Hormuz blockade) pushing up the inflation risk-premium, 2) the unwinding of a 15-year experiment with zero-rate/QE policies that began in 2008, and 3) ever-larger fiscal deficits demanding more duration risk capital. If sustained, the break above 5% could mark the definitive end of the 1981-2020 secular bond bull market and shift the global financial architecture—household leverage models, tech-stock valuation math, and emerging-market currency pegs—toward a higher-rate regime reminiscent of the 1960s-70s. Over a 100-year horizon, such inflection points tend to realign capital flows and political priorities; whether this becomes the modern analog to the post-1973 stagflation or fades like the 1990 Gulf War spike will hinge on the war’s duration and policymakers’ willingness to impose fiscal restraint.