A shift in US Treasury buyers toward value-oriented private investors has pushed 30-year yields to multi-decade peaks, according to Barclays Plc. Strategists Demi Hu and Anshul Pradan note that official demand from foreign central banks and the Fed has waned since 2022, leaving private investors as the marginal absorbers of supply. They estimate private investors now hold 73% of the Treasury market versus roughly 50% a decade ago, making the market more dependent on price-sensitive buyers.

Since the 30-year yield vaulted above 5% earlier this year, it has traded above that level for 41 trading days through Tuesday, the longest such streak since 2007. The sustained rise comes amid persistent inflation and larger budget deficits since the pandemic. Investors demand higher compensation, or term premium, for holding long-dated debt.

Barclays expects structurally higher term premium as mutual funds, foreign private investors, banks, and households demand greater yield concessions. The 30-year yield was around 5.23% on Tuesday, approaching a multi-decade high of 5.28%. The market awaits US inflation data and a $25 billion bond sale expected to draw the highest yield since August 2001.

As the market relies more on price-sensitive investors, the same supply may require larger yield concessions, reinforcing upward pressure on term premium.