Treasury bond selloff pushes 30-year yields toward 5% amid global debt concerns

The Treasury bond market came under intense selling pressure on Sep. 2, 2025, with the 30-year Treasury yield approaching the psychologically and economically critical 5% threshold that signals serious fiscal stress

The bond selloff reflects investor concerns about massive government bond supply hitting the market as the federal government borrows unprecedented amounts to fund operations while battling persistent inflation above Fed targets

Global government bonds sold off simultaneously across developed economies on Sep. 2, suggesting worldwide investor concerns about fiscal sustainability and monetary policy effectiveness in controlling debt and inflation

The 5% yield level on 30-year Treasuries represents a critical juncture where government borrowing costs become economically painful, potentially forcing lawmakers to choose between deficit spending cuts and fiscal austerity measures

Bond market stress signals that institutional investors are losing confidence in the government's ability to manage the national debt without resorting to inflating it away, creating feedback loops where higher borrowing costs increase deficits requiring even more borrowing

MarketWatch reported that Treasury market participants cited both supply concerns from massive government borrowing needs and inflation fears as primary drivers of the Sep. 2 selloff

Financial analysts warned that sustained yields above 5% could trigger broader economic instability by making mortgage rates, corporate borrowing, and consumer credit prohibitively expensive for ordinary Americans