Why Long-Term Treasury Yields Won't Fall Anytime Soon
Three structural forces are keeping long-term Treasury yields elevated, and Trump's policies aren't helping.
If you're waiting for long-term Treasury yields to drop and give your portfolio a boost, stop holding your breath. Three heavyweight forces are pinning those yields up — and none of them are going away quietly.
First, Trump-era policy risk is baked into the bond market right now. Traders aren't just pricing in today's news; they're pricing in uncertainty. Every tariff threat, every fiscal curveball adds a premium to long-dated Treasuries. That's a risk tax you're paying whether you like it or not.
Second, Washington is borrowing like there's no tomorrow. Heavy government debt issuance floods the market with supply, and more supply means lower prices — which means higher yields. Until Congress gets serious about the deficit (don't hold your breath on that one either), this pressure isn't letting up.
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Third, here's the twist most retail traders are sleeping on: AI is driving a corporate debt boom. Companies are issuing bonds to fund massive AI infrastructure buildouts. That corporate paper competes directly with Treasuries for investor dollars, keeping upward pressure on government yields too.
The brutal math is this — to get meaningfully lower long-term yields, you'd likely need a weaker economy that crushes demand for capital. That's not a trade you want to root for. For now, the path of least resistance for the 10-year is sideways to higher. Position accordingly.
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