--- title: "After the 30-Year US Treasury Yield Breaks the Key 5% Level, Wall Street Is Divided: Enter Now or Wait?" type: "News" locale: "en" url: "https://longbridge.com/en/news/286877263.md" description: "Goldman Sachs advises caution and waiting for a deeper sell-off, Barclays warns that yields could surge past 5.5%, and BlackRock suggests reducing bond holdings in favor of equities. Analysts point out that stubborn inflation, widening fiscal deficits, shattered expectations of Fed rate cuts, and instability in the Middle East are collectively suppressing buying interest, leaving the market without a pricing anchor and upside risks to yields still present" datetime: "2026-05-19T08:20:08.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/286877263.md) - [en](https://longbridge.com/en/news/286877263.md) - [zh-HK](https://longbridge.com/zh-HK/news/286877263.md) --- # After the 30-Year US Treasury Yield Breaks the Key 5% Level, Wall Street Is Divided: Enter Now or Wait? US long-term Treasuries faced a new wave of intense selling, with the 30-year yield breaking through 5% and climbing further to 5.14%, nearing its highest level since 2007. This has pushed global bond investors into a rare public divergence: should they enter now to lock in high yields, or continue to wait for a deeper decline? Following the breakout in the 30-year yield, major Wall Street institutions quickly diverged. **Goldman Sachs** believes some value signals have emerged but advises cautious operation; **Barclays** warned clients that yields could further breach 5.5%; while the head of research at **BlackRock** suggested investors reduce exposure to developed market government bonds, including US Treasuries, and shift toward equities. Meanwhile, Gregory Peters, Co-Chief Investment Officer of Fixed Income at **PGIM**, stated that although yields are attractive to him, he remains underweight on 30-year US Treasuries. "The global bond market is in chaos, and investors are losing confidence." **The core force driving this divergence is the superposition of multiple pressures:** stubborn inflation, continuously expanding fiscal deficits, soaring energy prices triggered by the situation in the Middle East, and deep uncertainty regarding the Federal Reserve's policy path. Analysts pointed out that these factors have collectively suppressed buying interest, causing key levels previously seen as strong support to fall one after another, and fundamentally shaking the market's pricing logic for US Treasuries. ## Key Levels Broken Successively, Market Seeks a New "Floor" Before this round of selling, the market generally viewed a 4.5% yield on the 10-year US Treasury as an attractive entry point, and the 5% level on the 30-year Treasury as a key threshold capable of attracting demand. However, both levels have been breached without the expected strong buying support emerging. The 10-year US Treasury yield is currently at 4.62%. Padhraic Garvey, Head of Global Rates and Debt Strategy at ING, expects the next target to be 4.75%. "The question is whether anyone will really step in to buy during this sell-off, because I think this situation will persist," he said. Ajay Rajadhyaksha, Chairman of Global Research at Barclays, was more direct: > "Yields may be at their highs for the year, but this in itself does not constitute a reason to go long duration. The forces driving the sell-off—fiscal deterioration, defense spending, sticky inflation, and central bank deadlock—will not dissipate within a week." Guneet Dhingra, Head of US Rates Strategy at BNP Paribas, pointed out that once the 30-year yield stands above 5%, the original "ceiling" effect has disappeared. > "In an environment of high inflation, rising deficits, and generally increasing global bond yields, there is no anchor now. What can stop yields from continuing to rise?" ## Inflation Expectations Rise, Fed Rate Cut Window Closes **Inflation is the most core driver of this sell-off.** Recently released US Consumer Price Index (CPI) and Producer Price Index (PPI) data were both stronger than expected, dashing market hopes for a rapid decline in inflation. The breakeven inflation rate, which measures long-term inflation expectations, rose to 2.507% on Friday, nearing a three-year high. Garvey warned that even a small rise in inflation expectations to 2.6%–2.7% would be enough to easily push yields up by another 10, 20, or even 30 basis points. **"This is the path for yields to break upward."** Furthermore, **as expectations for rate cuts were completely suppressed, short-end yields rose in tandem.** Jim Barnes, Director of Fixed Income at Bryn Mawr Trust, stated that market sentiment has shifted significantly. > "This is a different interest rate environment. With no positive progress in the Iran situation and data continuously pointing to inflationary pressures, the bond market seems to have laid its cards on the table—we must reprice." Analysis indicates that investors are beginning to seriously consider that the Federal Reserve will not only fail to cut rates but might even hike them again if inflation fails to subside. **Beyond inflation, deep changes in the structure of US Treasury buyers are also weighing on the market.** Dhingra pointed out that in the past, the main buyers of US Treasuries were countries with trade surpluses with the US. These buyers were insensitive to short-term price fluctuations and could provide stable demand support when yields rose. > But the current buyer base is vastly different—they come more from financial centers such as the UK, Belgium, the Cayman Islands, and Luxembourg. These regions are the main custody hubs for various global hedge funds holding US Treasuries and all rank among the top seven non-US holders of US debt. These buyers are more sensitive to price and do not automatically enter the market just because yields rise. Dhingra stated that this means yields may need to rise to higher levels to truly trigger sustained buying. **"We haven't reached the end yet. It's only May, and inflation data could be higher."** ## Middle East Situation Becomes a Variable, Value Arguments Could Fail at Any Time Beyond fundamental pressures, the situation in the Middle East has added extra uncertainty to the market, making any "value buying" logic appear fragile. During Asian trading hours on Monday, long-term US Treasury yields briefly rose to their highest level since 2023, before falling back on market rumors of a breakthrough in US-Iran negotiations and the potential reopening of the Strait of Hormuz. However, subsequent reports denied this optimistic expectation, and the trend reversed again. At the close in New York on Monday, Trump stated that he had halted military actions against Iran originally scheduled for Tuesday, claiming that "serious negotiations" were underway. The bond market received brief support, but gains were limited, with investors remaining highly wary of a "false dawn." John Sidawi, Senior Portfolio Manager at Federated Hermes, said: "The current value argument is very fragile." He stated that **this logic depends entirely on the direction of the Middle East situation. "Once the situation escalates, the value argument can be thrown out."** Goldman Sachs' strategy team characterized the current situation as an "uneasy introduction of value"—from multiple indicators, long-term US Treasuries are beginning to show attractiveness, but the situation is likely to worsen further before it improves. The strategy team led by George Cole at the bank advised that investors wishing to go long duration should adopt structural strategies that limit downside risk, **and wait for a "deeper sell-off" or "credible signals of restored energy flows" before considering adding to long-duration positions.** ### Related Stocks - [SHV.US](https://longbridge.com/en/quote/SHV.US.md) - [GOVT.US](https://longbridge.com/en/quote/GOVT.US.md) - [IEF.US](https://longbridge.com/en/quote/IEF.US.md) - [BIL.US](https://longbridge.com/en/quote/BIL.US.md) - [TLT.US](https://longbridge.com/en/quote/TLT.US.md) - [GS.US](https://longbridge.com/en/quote/GS.US.md) - [BARC.UK](https://longbridge.com/en/quote/BARC.UK.md) - [BCS.US](https://longbridge.com/en/quote/BCS.US.md) - [BLK.US](https://longbridge.com/en/quote/BLK.US.md) - [ING.US](https://longbridge.com/en/quote/ING.US.md) - [BNPQY.US](https://longbridge.com/en/quote/BNPQY.US.md) - [FHI.US](https://longbridge.com/en/quote/FHI.US.md) - [W4VR.SG](https://longbridge.com/en/quote/W4VR.SG.md) - [BTX.US](https://longbridge.com/en/quote/BTX.US.md) - [BIT.RT*.US](https://longbridge.com/en/quote/BIT.RT*.US.md) - [BDJ.US](https://longbridge.com/en/quote/BDJ.US.md) - [BSTZ.US](https://longbridge.com/en/quote/BSTZ.US.md) - [BIT.RT.US](https://longbridge.com/en/quote/BIT.RT.US.md) ## Related News & Research - [The surge in US Treasury yields: Three key drivers](https://longbridge.com/en/news/286739892.md) - [US bond yields hit multi-year highs, testing stock rally](https://longbridge.com/en/news/286682715.md) - [TREASURIES-Yields on longer-dated bonds hit year-plus highs overnight](https://longbridge.com/en/news/286778191.md) - [Dow Jones Muted as Rising Yields Pressure Sentiment](https://longbridge.com/en/news/286783382.md) - [ROMANIAN CENTRAL BANK GOVERNOR SAYS INFLATION COULD PEAK IN JULY AT AROUND 11%](https://longbridge.com/en/news/286880955.md)