3 Reasons to Brace for Further Bond Market Declines

BNP Paribas warns that long-term Treasury yields will keep rising, predicting the 30-year U.S. bond yield will reach 5.6% in coming months, pressuring stock markets further. The bank cites three factors: the Federal Reserve's new rate-hike cycle, widening government deficits, and underestimated fiscal spending. Higher yields raise Treasury interest costs, potentially adding $168 billion annually by year two. Rising oil prices, inflation concerns, and heavy borrowing by both government and AI hyperscalers drive the trend. The 30-year yield hit 5.43% on September 24, up from 4.83% at the start of the year.