Long-bond spike would crush stock gains and deepen bond-fund losses
Bond-market fundamentals are weakening, pressuring investors in both long-term bonds and stocks.
U.S. interest rates have drifted higher in recent weeks, but a much larger move may be ahead. The 30-year Treasury yield BX:TMUBMUSD30Y is pushing 5.2% - a critical level. A sustained breakout above that technical resistance could open the path to 6%.
The impact could extend well beyond the Treasury market. Higher long-term yields would place additional pressure on bond ETFs such as the rate-sensitive iShares 20+ Year Treasury Bond ETF $(TLT)$ TLT and the iShares TIPS Bond ETF $(TIP)$ TIP.
Real yields are climbing, too. The Treasury Inflation-Indexed Long-Term Average Yield, a measure of real rates, is approaching 3% - its highest level since 2008.
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Using technical analysis, 5.2% is a significant resistance level on the 30-year Treasury chart. It was tested and held in October 2023 and again in May 2026. Additionally, the chart is showing a bullish technical pattern known as an ascending triangle. These continuation patterns extend the previous trend. A sustained break above 5.2% would confirm the pattern and could produce a projected move above 6%. Until then, 5.2% remains resistance. A failure at that level, followed by a break below the established uptrend, would suggest that yields are turning lower.
Global pressures
Investors have been looking for higher compensation to hold U.S. Treasury debt.
It isn't just the U.S. where rates are moving higher. Globally, macro forces, such as rising inflation and large budget deficits, are pushing rates higher. While this doesn't mean that U.S. rates must rise, it does indicate that the path of least resistance may be higher, providing a tailwind for U.S. rates. The same pressures pushing rates globally also apply to the U.S.
One reason rates may also rise is that investors have been looking for higher compensation to hold U.S. Treasury debt. By historical standards, premiums are still low and could rise further. Currently, the 10-year Treasury zero-coupon-bond term premium is estimated at around 80 basis points (0.80%).
Long-term real rates, as measured by the Treasury Inflation-Indexed Long-Term Average Yield, are about 2.9% and have been steadily climbing with long-term nominal rates. This is an indication that inflation expectations have remained unchanged or declined.
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Spillover effect
Higher rates extend beyond the bond market, and are reflected in ETFs like TLT, which hold long-term bonds. The technical chart of the TLT shows the inverse makeup of the 30-year rate. Here is a descending-triangle pattern that has formed over many months, with support at $82. Meanwhile, momentum measures, such as the relative-strength index, have been trending lower, forming a series of lower highs and lower lows. A decisive break below $82 would confirm the bearish pattern and signal additional downside risk.
The same can be seen in the TIPS (Treasury Inflation-Protected Securities) ETF, which is a basket of inflation-protected securities. When the TIPS ETF is falling, it typically means real yields are rising. Currently, the ETF has broken a long-term uptrend that ran from October 2023 to June 2026, making the break below that trend line significant.
Now, the TIP is sitting on a support level of between $107 and $108 that, if broken, could further that decline. Additionally, momentum, as measured by the relative-strength index, has been declining, forming a series of lower lows and lower highs.
Against this backdrop, a 6% 30-year Treasury yield looks increasingly possible. And with nominal yields, real yields, global rates and term premiums all moving in the same direction, a 5.2% yield is now the bright red line investors should watch.
Michael Kramer is the founder of Mott Capital Management and a long-only investor focused on macro themes. He analyzes long-term macro trends and short-term market risk using technical analysis, fundamentals and options-market positioning.
-Michael Kramer
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(END) Dow Jones Newswires
July 24, 2026 17:38 ET (21:38 GMT)
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