The yield on the 30-year Treasury reached 5.31% on August 17, the highest level since 2007.¹ Germany's long rates sit near 2011 levels, and Canada's 30-year is at its highest since 2010.² Japan's 10-year touched 2.95%, a level last seen in 1996.³ When long-dated government bonds reprice in every major market at once, the explanation usually is not any single government's budget.
Two things changed on the demand side.
For roughly 15 years, the largest buyers of long-dated government debt were not price-sensitive. Central banks purchased through quantitative easing. Japanese institutions bought overseas because domestic yields paid nothing. Both have stepped back. Japanese investors sold $29.6 billion of U.S. debt in the first quarter of 2026 as yields at home became competitive.⁴ Foreign holdings of Treasuries declined again in June, with the United Kingdom, China, and Japan all reducing positions.⁵
The second change is more recent. The Treasury now competes for long-duration capital against corporate issuers. The five largest hyperscalers issued approximately $121 billion of U.S. corporate bonds in 2025, against a $28 billion annual average from 2020 through 2024.⁶ Alphabet recently placed 30-year paper at a yield near 6.4%.⁷ Bank of America economists estimate that corporate and mortgage-backed supply added roughly 0.3 percentage points to the 10-year yield this year.⁸
Supply did not shrink. The marginal buyer became someone who requires compensation to hold duration.
Now most of the portfolios we review are equity-heavy, and this makes sense. Higher yields don’t necessarily mean equities decline. Equities have delivered acceptable results in higher-rate periods when nominal growth was also higher. Two important observations:
1) Long Treasuries may not offset equity losses
2) Equity and fixed income sleeves may not provide independent exposures
When inflation is the primary driver of rates, both have tended to move together.
The question we work through with clients is not where the 30-year trades next quarter. It is whether each sleeve of the portfolio is doing the job it was assigned.
Sources
1. Bloomberg, "US Bond Selloff Drives 30-Year Yields to Highest Since 2007," August 17, 2026.
2. Bloomberg, August 17, 2026.
3. Trading Economics, Japan 10-Year Government Bond Yield, over-the-counter interbank quotes, August 18, 2026.
4. Federated Hermes commentary, reported by CNBC, July 14, 2026.
5. U.S. Department of the Treasury, Treasury International Capital data for June 2026, reported by CNBC, August 18, 2026.
6. BofA Securities report dated January 9, 2026, reported by Reuters, January 15, 2026.
7. Bloomberg, August 17, 2026.
8. BofA Global Research client note, reported by Bloomberg, August 2026.
Disclosures
Yield and valuation figures are as of the dates noted and change continuously. Figures cited from third-party sources have not been independently verified by AFE Private Wealth.
Advisory services provided by NewEdge Advisors, LLC doing business as AFE Private Wealth, as a registered investment adviser.
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