The yield on the 30-year U.S. Treasury briefly surged to 5.15% last week, its highest level since late 2023. Though it has since retreated to around 4.95%, the long bond remains stubbornly close to the psychologically important 5% mark.
This isn’t the first time the 30-year has breached that level in 2025. In fact, it’s happened multiple times for different reasons. Last week’s jump came after the House passed President Donald Trump’s sweeping tax cut package, stoking fears of ballooning budget deficits and a rising national debt.
Back in April, it was concerns over Trump’s trade war and speculation that foreign investors could pull back from U.S. government bonds that caused yields to jump.
And in January, the bond market responded to expectations that Trump’s economic agenda, centered around tax cuts and tariffs, would spur faster growth and inflation, while keeping the Fed sidelined following its short-lived rate-cutting stint in 2024.
Whatever the reason, the Treasury market remains on edge. The 5.15% high from last week was just shy of the 5.18% peak seen in October 2023, when the Fed’s aggressive rate hiking campaign drove long-term yields to cycle highs in response to the inflation surge of 2021-2022.
While those acute inflation fears have faded somewhat, they haven’t disappeared. And many investors are coming to terms with the idea that inflation may settle at a structurally higher level than in the pre-Covid era, driven by long-term trends like tighter labor markets, reduced immigration and deglobalization.
These factors, combined with increased Treasury issuance tied to rising deficits, are putting upward pressure on interest rates, particularly at the long end of the curve.
TLT Investors Still Bet on Duration
Despite these pressures, many investors are sticking with, and in some cases—doubling down on—long-term Treasurys.
The iShares 20+ Year Treasury Bond ETF (TLT) saw more than $2 billion of inflows last week. The $48.8 billion fund has long been a go-to vehicle for investors seeking exposure to the far end of the Treasury curve.
With an effective duration of 15.5 years, TLT is highly sensitive to rate moves, making it attractive for those expecting yields to eventually fall.
It’s also commonly used as a portfolio hedge. If the economy stumbles or a risk-off environment emerges, long-term Treasurys often rally. That was the classic dynamic, anyway.
In recent years, though, that bond-stock inverse correlation has weakened. For example, during the April 2025 selloff—when the S&P 500 tumbled more than 11% between March 31 and April 8—TLT also fell by 2.6%, failing to provide its usual ballast. So far this year, the S&P 500 is down 0.7%, while TLT is off 1.4%.
Even so, investors aren’t giving up on long bonds. In a world of elevated interest rates and greater rate volatility, funds like TLT remain useful for both directional bets and risk management.
Other Long Duration Options
For those seeking even more rate sensitivity, there’s the PIMCO 25+ Year Zero Coupon U.S. Treasury Index ETF (ZROZ) , which holds Treasury STRIPS and has a duration of 27.6 years.
Meanwhile, the US Treasury 30 Year Bond ETF (UTHY) offers more targeted exposure. Unlike TLT, which holds a range of bonds with maturities between 20 and 30 years, UTHY focuses exclusively on the most recently issued 30-year Treasury bond.
Its duration is around 15.5 years, similar to TLT.
As long as markets remain jittery over debt and inflation, expect long bond ETFs to stay in the spotlight.
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