30-Year Treasury Yield Tops 5% as Inflation Erodes Bonds' 60/40 Hedge Role

12 articles · Updated · Reuters · May 28

Long-dated Treasuries have sold off sharply enough to challenge their traditional role as a portfolio buffer, with the 30-year yield rising further above 5% than analysts expected before buyers emerged.
The shift reflects sticky inflation, solid U.S. growth, Iran-war-driven oil pressure and heavier expected bond supply from deficits, all of which have pushed investors to demand higher term premiums.
The 60-day correlation between S&P 500 and Treasury returns is now the highest in more than two decades, weakening the negative stock-bond relationship that underpins classic 60/40 portfolios.
Investors are not abandoning Treasuries altogether, but some managers now prefer shorter maturities while arguing longer-dated bonds may need still higher yields to compete with strong equity returns.
The debate extends beyond yields to confidence in U.S. fiscal sustainability and the dollar, even as Treasuries remain the world's deepest and most liquid bond market.

How will the new Fed Chair navigate sticky inflation while facing pressure for lower interest rates?

With conflict fueling inflation, is the era of bonds as a safe haven for investors now over?

Can the AI productivity boom truly prevent a recession caused by disrupted global oil supplies?