30-year Treasury bond stays above 5% for most of July

Thirty years seems like a long way away. It’s not, in the world of fixed income.

The yield on the 30-year Treasury bond, a benchmark for long-term borrowing, has closed higher than 5% for most of July. So far in 2026, the US government security has traded above 5% for 30 days, as of July 27, the longest stretch since 2007, Bloomberg reported.

“Behind the sustained rise in long-dated yields is growing concern about a deteriorating fiscal picture, just as a deluge of issuance to fund artificial intelligence infrastructure is flooding the corporate debt market,” according to Bloomberg.

“We are definitely approaching the highest levels seen since before the [global financial crisis],” Dominic Pappalardo, chief multi-asset strategist at Morningstar Wealth, told CFO Brew.

That’s not great news for CFOs.

Higher long-term yields signal that investors want a larger return to cover the risk of lending money for long periods, Axios reported.

So as the 30-year yield rises, interest rates do too, Pappalardo said, directly impacting an organization’s “borrowing and financing costs.” Whenever the 30-year Treasury yield increases, the corporate borrowing rate typically climbs, he explained. “So CFOs have to pay more money to finance their company’s operations and investments.”

That will lead to a “higher threshold” for companies to launch new endeavors, like research for a new product, real estate investing, or acquisitions, because the organization needs to generate bigger returns, Pappalardo said.

For example, the higher long-term rate could make mergers harder “because that extra return has to come from somewhere,” he explained.

Acquirers may try to buy businesses at a lower valuation, which targets might not agree to, he said. To justify a high price, companies might acquire a business and then implement cost cuts or price increases after the deal closes, he said. “There are multiple factors that, as a result of higher Treasury yields, would slow down M&A activity,” he said.

A higher yield may mean “equity will be a bigger component of deal structures,” while debt could get more expensive, Pappalardo said. “Private equity firms may have to adjust their mix because now the price of issuing equity is actually closer to the price of issuing debt.”

To date, corporate bond yields haven’t risen sharply. As of July 28, the ICE BofA BBB US Corporate Index Effective Yield had risen 19 basis points for the month to 5.569%.

The 30-year Treasury trading above 5% may seem high, but only when compared with “recent history,” Pappalardo said. Current yields are nowhere near the soaring levels of the past, when the 30-year Treasury hit 15% in 1981, according to the New York Times.

The 2008 global financial crisis reshaped the rate environment. Afterward, the 30-year yield dropped and “stayed low for a long time, reaching a low near 1% in 2020,” Pappalardo said, adding that the 30-year Treasury yield didn’t rise above 4% until 2022.