The Kobeissi Letter flags a number that should worry anyone holding long bonds: this week the US Treasury sold 30-year bonds at a 5.06% yield, the highest at any 30-year auction since 2007. The 30-year yield has climbed back above 5.00%, though it still sits below the May 20th peak of 5.20%, itself the highest since July 2007. For scale, the same maturity was auctioning near 2.00% in early 2022. Kobeissi's explanation is a supply-and-demand story about capital. The US debt burden keeps expanding, Treasury issuance is heavy, inflation risks linger, and worries about future borrowing needs all force the government to offer higher yields to attract buyers. Then there is a newer twist: the AI investment boom. Tech companies are issuing record amounts of debt to fund AI infrastructure, and that competes with the government for the same pool of savings, nudging long-term borrowing costs higher for everyone. Higher long yields ripple into mortgages, corporate refinancing and equity valuations, which is why a dry Treasury-auction statistic matters well beyond the bond desk. Kobeissi's blunt framing: the US debt crisis is intensifying.
Why it matters · When the government and AI-hungry Big Tech bid for the same savings, long-term rates rise for everyone, and stock valuations feel it.
Worth asking · With 30-year yields near 2007 highs, is the bond market pricing a real debt crisis, or overreacting to AI-era borrowing?