The US Treasury auctioned $25 billion in 30-year bonds on Tuesday, and the debt cleared at a yield of 5.046%. That's the first time since 2007 that the government has issued long-dated debt with a yield north of 5%. The 30-year yield hit an intraday high of 5.05% on May 12, the highest since July 17 of this year.
Why yields are climbing
The move follows a hotter-than-expected Producer Price Index. The PPI Final Demand reading came in at 6% — the highest since January 2023. The 10-year Treasury benchmark yield rose to 4.49%, while the 2-year yield, more sensitive to Fed policy, eased slightly to 3.981%. Markets are now pricing in a 55% probability that the Federal Reserve will hike rates by April 2027.
What higher yields mean for Bitcoin
Rising Treasury yields tighten financial conditions across the board. Borrowing costs go up, and safer fixed-income investments suddenly look more attractive. A 30-year yield above 5% raises the opportunity cost of holding non-yielding assets like Bitcoin and gold. That dynamic has historically weighed on crypto prices — though the selloff isn't guaranteed, especially if investors see Bitcoin as a hedge against fiat debasement.
The Fed's next move
The probability of a rate hike within the next year has crept above 50% for the first time in months. That's a shift from the narrative that dominated early 2026, when cuts seemed more likely. The bond market is now telling a different story — one where sticky inflation and a strong economy keep the central bank on hold, or even leaning toward tightening. The next concrete data point will be the May CPI report, due out in early June.
