30-Year T-Bills Top 5% as Moody's US Rating

Yields On 30-Year T-Bills Surge 5% As Moody's US Rating Cuts From Aaa To Aa1

19 May 2025 at 18: 37

Reading time: 2 minutes

The yield on the 30-year US Treasury bond has surpassed 5% for the first time since April, reaching an intraday high of 5,011%. The rise follows a Moody's downgrade of the United States, which saw the country lose its Aaa rating amid rising deficits and rising interest costs.

It is notable that the last time the long-term yield curve reached 5% was on April 9. This occurred during the infamous “tariff tantrum,” a period in which both the crypto market and the US stock markets fell sharply. At the time, the price of Bitcoin (BTC) around its local low of around $75.000. The cryptocurrency has since made a strong comeback and is now trading around $103.000, after peaking at $106.000 on Sunday.

The 30-year Treasury’s closing yield above 5% was last recorded on October 31, 2023. The highest closing yield in a long time was 5,11% on October 19, 2023, the highest figure since July 2007, almost 18 years ago. The current yield is just 12 basis points shy of this milestone.

In addition, the United Kingdom overtook China in March to become the second-largest foreign holder of U.S. Treasuries, with a total of $779,3 billion. Japan remains the largest foreign holder. Both China and Japan have continued to reduce their U.S. Treasuries over the past year, underscoring the U.S.’s urgent need to find new buyers for its debt.

As the U.S. Treasury faces rising deficits and the possibility of more bond issuance, rising demand for those bonds will increase supply, pushing interest rates higher as prices fall. Meanwhile, Nasdaq futures are down about 2%, reflecting broader risk aversion in the market.

Frequently Asked Questions

Why is the rise in the interest rate on the 30-year government bond important?
The rise indicates investors are reconsidering their risks and could lead to higher borrowing costs, affecting the broader economy.

What does Moody's credit downgrade mean for the US?
It means that confidence in the US economy and its creditworthiness is under pressure, which could reduce its attractiveness to investors.

How does the stock market decline affect the crypto market?
A lower stock market could lead to a decrease in risk appetite among investors, which could reduce demand for cryptocurrencies.

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