A steep selloff in long-term Treasury bonds intensified on Monday, driving yields to multi-decade highs.

This movement has dragged the prices of long-duration bond ETFs down to some of their lowest levels in years.

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The yield on the 30-year Treasury bond climbed to 5.15%, marking its highest level since 2007.

Because bond prices move inversely to yields, exchange-traded funds holding long-dated Treasurys experienced sharp declines.

Long-duration bonds have borne the brunt of the recent market selloff. Investors are currently demanding higher compensation for holding debt far into the future.

Inflation and Debt Concerns Fuel Yield Rise

Rising commodity prices, particularly oil, have pushed inflation expectations much higher. Additionally, growing concerns about mounting U.

S. debt levels have added upward pressure on long-term yields.

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The market shift has not been limited to the 30-year bond alone.

The yield on the benchmark 10-year Treasury note rose to 4.63% on Monday, reaching its highest point since January.

The 10-year yield is widely viewed as one of the most important interest rates globally.

This status comes from its heavy influence on mortgage rates and broader borrowing costs across the U. S.

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economy.

The iShares 7-10 Year Treasury Bond ETF, which tracks Treasurys with maturities between seven and 10 years, has dropped 1.6% year-to-date.

Short-Term Yields Also Rise, but Remain Below Peaks

Shorter-term yields have risen as well, though by a smaller margin. The two-year Treasury yield climbed to 4.09%, its highest level since February.

Despite the recent surge, the two-year yield remains below its 2023 peak by around 110 basis points.

Fed funds futures currently suggest investors expect the Federal Reserve to keep interest rates unchanged for the remainder of this year.

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However, financial markets are still pricing in the possibility of one rate hike next year.