Traders work at the New York Stock Exchange (NYSE) on August 6, 2026 in New York City. Spencer Platt | Getty Images Treasury yields retreated slightly on Tuesday after long-term bonds hit their highest level in nearly two decades amid a worsening U.S. fiscal situation and persistently higher inflation. The yield on the 30-year US Treasury bond fell more than 2 basis points to trade at 5.285%. It hit a new 19-year high earlier in the day. The yield on the 10-year Treasury bond, the main benchmark for mortgages, auto loans and credit card debt, was more than 1 basis point lower at 4.706%. The 2-year Treasury yield, which typically reacts in line with the Federal Reserve’s short-term interest rate decisions, fell less than 1 basis point to 4.175%. One basis point is equivalent to 0.01%, and yields and prices move inversely with each other. The measures follow news that the US fiscal deficit jumped to $432.3 billion in July, its highest monthly total since March 2021, raising the year-to-date deficit to nearly $1.8 trillion. Interest paid to finance the nearly $40 trillion national debt has cost the government about $1.2 trillion this year. On the inflation side, recent readings have shown low levels of overall price increases in June and July, but the annual rate remains well above the Federal Reserve’s 2% target. media. A senior Iranian official also told Reuters that Tehran would take an offensive stance if diplomacy with the United States fails. “Markets have seen increasing weakness over the past 24 hours, with bonds and stocks falling thanks to negative geopolitical headlines from the Middle East,” Deutsche Bank’s Jim Reid wrote in a note on Tuesday. “There was no single catalyst for the declines, but with little sign of the US and Iran reaching any kind of deal, that meant investors priced in a longer closure of the Strait of Hormuz.” Resurgent fears about inflation are driving up government borrowing costs around the world, with many bond yields with longer maturities reaching multi-decade highs. The 10-year Japanese bond yield hit a 30-year high. German 30-year bond yields hit their highest level since 2011, while French 30-year government bond yields rose to a post-2008 high. British government bond yields also advanced. On the economic front, US import prices fell 0.4% in July. Economists surveyed by Dow Jones expected a 0.1% gain for the month. CNBC’s Jeff Cox and Chloe Taylor also contributed to this report. Correction: An earlier version misspelled Jim Reid’s name. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.
