Barclays analyst Anshul Pradhan suggests that the yield on 30-year US Treasury bonds could reach 6%. This forecast depends on whether heavy investments in artificial intelligence by major technology companies lead to sustained economic productivity growth.
As of September 28, the 30-year yield stood at 5.61%, marking its highest level since 2002. This reflects a 100-basis-point increase over the preceding six months, rising from a low of 4.61% in March 2026.
The bank notes that US tech giants are projected to spend as much on AI infrastructure this year as they did in the previous three years combined. If these investments boost productivity, the Federal Reserve may need to maintain a higher neutral interest rate permanently.
The bank acknowledges that this outcome is not certain. If AI capital expenditure slows or fails to deliver productivity gains, yields could reverse course, potentially leading to a rally in intermediate Treasury bonds in the five-to-ten-year range.
A rise to 6% would represent the highest yield level since June 2000. Such a shift would cause price declines for existing long-duration bond holdings, directly impacting pension funds and insurance companies.
