30-year US Treasury yields hit 5%, raising debt servicing costs to $1.2 trillion annually.

The yield on the 30-year US Treasury bond has reached 5% again, pushing the annual cost of servicing US debt to about $1.22 trillion, or over 4% of GDP—the highest since the early 1990s. This rise is driven by geopolitical tensions affecting oil prices and inflation expectations, which in turn pressure Federal Reserve policy and increase borrowing costs for the government, businesses, and consumers. The sustained high yields could compress stock valuations, increase mortgage rates, and strain the federal budget, signaling potential challenges ahead for investors and the economy. Market watchers are closely monitoring whether yields will retreat or push higher, which could trigger significant market shifts.