US 30-year bond yield hits highest since 2007: What it means for stocks and S-REITs

Beansprout Pro in Brief

• The 30 year US Treasury yield has climbed to about 5.3%, its highest level since 2007, even though the Fed has kept its policy rate unchanged. This unusual gap suggests that forces beyond Fed policy are pushing long term borrowing costs higher.
• At least five separate pressures are reinforcing one another, including growing government borrowing and changing demand for US debt.
• Unlike in 2007, the rise is not being driven mainly by Fed rate increases, which means the usual market playbook may not apply.
• Higher yields are putting pressure on technology and AI stock valuations despite strong earnings, while Singapore REITs with higher leverage or refinancing needs may also be more exposed.
• In this update, we explain what is driving the move, why this is different from 2007, and the signals that could tell us whether yields are beginning to stabilise.