Wealthion Macro Bites – 30-Year Treasury Yield Hits Its Highest Level Since 2004

The strongest S&P PMI reading (58.4) since July ’21 has combined with inflation angst and growing recognition of unsustainable sovereign debt burdens to spark a jailbreak in long-term Treasury yields.   A fresh jump in oil prices on Thursday lifted the 30-year Treasury yield as much as four basis points to 5.44% (highest since June ’04) and the 10-year yield to 5.148% (highest since June ’07).  European yields are also on the rise, while JGB yields touched levels last seen in 1996.  Yield of Bloomberg’s Global Aggregate Treasuries index (worldwide government debt) now stands within a whisker of 4% (highest since ’07).

On the sidelines of the U.N. General Assembly, Swiss-based commodities trader Mercuria announced a $500M commitment to Project Vault, a program backed by the U.S. ​Export-Import Bank ​to build strategic inventories of critical minerals so U.S. companies can retain access ‌to critical minerals during periods of supply disruption or market dislocation.  Swiss-based Glencore also announced its selection by the U.S. to ​be a founding partner in the project.

Separately, the U.S. State Department and the Argentine Foreign Ministry announced in a joint statement the launch of the "Andes-Atlantic Corridor," an initiative to strengthen infrastructure links between Argentina's critical mineral-rich northwest, the Vaca Muerta energy basin, and Atlantic ports. Washington plans to support the initiative through the financial instruments of the Export-Import Bank (EXIM), the Development Finance Corporation (DFC), and the U.S. Trade and Development Agency, while Buenos Aires is committed to strengthening the regulatory framework and incentives for foreign investors.

China’s Guangzhou Futures Exchange is preparing to roll out lithium hydroxide contracts as early as this year.  The contracts can be physically settled to boost price transparency and give the battery supply chain a hedging tool across different ingredients.  Company filings show Ganfeng Lithium Group Co., Tianqi Lithium, Chengxin Lithium, Jinzhou Yongshan Lithium, and Sichuan Yahua Industrial Group have applied to be designated delivery depots.

Boston Fed President Susan Collins expects at least one more rate hike before year-end, “A somewhat more restrictive federal funds rate will help ensure that inflation durably returns to target.”  Separately, Fed Vice Chair for Supervision Michael Barr told a conference of mortgage lenders the Fed will “likely” raise interest rates again to counter persistent inflationary pressures, “In my base case, further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion.”  Probabilities of an Oct. FOMC rate hike have risen to 73%.

Citing immediate monetary policy headwinds, Goldman Sachs lowered its end-’26 gold price forecast to $4,650 per ounce (from prior $4,900) while leaving its end-’27 forecast at $5,400.

The U.S. Treasury will purchase up to $6 billion of longer-dated Treasuries on Thursday, in line with the first such operation under Secretary Scott Bessent's expanded program to stem the recent rise in borrowing costs.

AI watch:  Moody’s confirms Amazon, Microsoft, Alphabet, Meta and Oracle have a combined $2.8T in off balance sheet obligations (leases, purchase commitments, and guarantees) tied to their AI investments (up from $350B in ’23).  Leases for data centers not yet built increased to $1T from $662B last year.  Purchase commitments surged to $1.57T from $528B in ‘25. And guarantees rose to $137B from $51B.