U.S. Treasurys are now firmly in the 'danger zone,' strategists say

A trader works at his desk on the floor of the New York Stock Exchange (NYSE) in New York on May 19, 2026. Timothy A. Clary | Afp | U.S. Treasurys have entered a "danger zone" as surging long-term yields raise fears that sticky inflation and hawkish rate expectations could begin spilling over into equities and broader risk assets, said HSBC. The selloff in government bonds intensified Tuesday, pushing the 30-year Treasury yield above 5.19% to its highest level since 2007. Meanwhile, the benchmark 10-year yield climbed toward 4.69%. Yields on the 30-year are up slightly less than 1 basis point at 5.184% as of 9:10p.m. ET, while yields on the 10 year are at 4.667%. "U.S. Treasuries are now firmly in the Danger Zone – the level of 10Y UST that tends to put pressure on virtually all asset classes," HSBC strategists wrote in a note late Tuesday, warning that further repricing in terminal rate expectations could drive yields "even further into the Danger Zone, likely leading risk assets temporarily lower." The bank said markets have so far remained relatively resilient because corporate earnings growth has stayed robust, valuations had already partly adjusted before the recent Iran tensions, and investors still broadly believe the Middle East conflict will mostly just affect oil. …