Could Treasury Bond Yields Hit 6%? Buy Now Or Wait? Might The Fed Raise Rates?

Could Treasury bond yields hit 6%, especially since 30-Year Treasury hit its highest level since 2007 last week. Should you buy now or wait and might the Fed raise rates with skyrocketing oil prices and inflation fears?

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Could Treasury bonds hit 6%? Hello, Diamond Estic Member Super Savers and Course fans. I hope you're healthy and well. As I've said before, 5% safe and guaranteed seems to be the magic number that many of our fixed income regulars often say would make them happy and sleep well at night. Well, we reached that magic number last week, but no sooner were long-term treasuries at that level for a day or two than this email crossed our desks. Hi Jen, longtime fan, what do you think? Any chance that treasury bonds will hit 6%? So let's take it step by step. Yields for 20 and 30 year treasuries closed at 5.14% and 5.12%, respectively, this past Friday, May 15th, 2026. For the 30-year Treasury, this was the highest yield since 2007. And given that not just the sender of this email, but other VIP members are also wondering what they should do: lock in these 5% plus rates right now or wait for even higher rates, maybe potentially even 6% on longer dated treasuries, especially since the latest producer price inflation reading of 6% is a leading indicator of where prices might go. So with that in mind, here are the three topics I'll be covering today. 1. How do we interpret the latest numbers? And will treasury yields keep going up? 2. Where can you get up to 5.47% rates for the base part of your portfolio? This section and the next one will be primarily for those of you who are laddering multi-year guaranteed annuities, migas, and treasuries for a safe, stable, and predictable income stream that hopefully lasts a lifetime. And three, what are the predicted yields for the upcoming week's treasury auctions? Here we'll be talking about this week's 20-year T bond and 10-year TIPS auctions. Let's dive in now, folks. How do we interpret the latest numbers? And will Treasury yields keep going up? As our VIP members and the regulars on this channel have heard us say often recently, we think that current yields for long-term treasuries are really driven by oil prices and their impact on inflation. And the data on this front hasn't been great recently. Oil prices continue to hover around $100 per barrel. And the April numbers that came out last week showed consumer price inflation running at 3.8% year over year and producer price inflation even higher at 6% year over year. So it may be no wonder that yields for 20 and 30 year treasuries closed at 5.14% and 5.12%, respectively, this last Friday, May 13th, 2026, as I said earlier. We don't have a crystal ball here at Diamond Nesting, but we can share our three personal scenarios for where treasury yields might go. Our first scenario is a continuation of what we've seen since the US and Iran agreed on a ceasefire in early April, an uneasy and fragile standoff that keeps the Strait of Hermuz basically closed for oil tankers, but where there is enough oil coming to market from alternative sources to prevent a full blown energy scarcity. Oil would continue to hover around $100 per barrel, which would push inflation and long-term treasuries a bit higher in a one-off shock, but the Fed would not increase short-term rates and market yields would stabilize again, maybe a bit higher than now, once the global economy has digested the new level for oil around $100, so to speak. Under this scenario, the best approach might be to continue with your current strategy, but to keep your eyes open, both for changes in the direction of travel, but also for unexpected opportunities to maybe lock in an attractive yield here or there. Our second scenario would be that the Strait of Hermuz reopens. Maybe the US and Iran come to an agreement, or maybe outside pressure and or military force prize the waterway open. In such a best case scenario, oil would flow unhindered again to global markets, which might bring oil prices down again sharply in a short period of time. With oil cheaper, inflationary pressure would ease, long-term treasury yields would come down, and the Fed might even see some room to lower rates later this year. If you share this optimistic outlook, you might want to lock in attractive long-term yields now before they come down again. And our third scenario is one where everything breaks down. Fighting resumes, the Strait of Hermuz remains closed, and Iran manages somehow to disrupt the remaining two pipelines in Saudi Arabia and the United Arab Emirates that have a combined capacity to pump maybe 8.5 million barrels per day to ports outside the Gulf. Oil prices would go up even more on global markets, inflation would follow, the Fed would raise rates to keep inflation at least somewhat under control, and long-term treasury yields would keep going up. And if everything goes badly, we might even end in a stagflation like back in the 1970s after the initial oil shock. If that's your scenario, you would avoid locking yourself into long-term treasuries, but stick with shorter maturities and or buy inflation protective bonds such as tips and I bonds, in addition to real assets such as equities, real estate, precious metal, and commodities. The hard part, of course, is to assign probabilities to the three scenarios we just discussed. At the end of the day, it will all depend on the available resources and intentions of a handful of key decision makers. And that's very hard for us to predict at this point in time. In the case of Iran, we may not even know for certain where the buck ultimately stops. Now, the CME Fed watch tool as of close of business on Friday, May 15th, 2026, predicted with a probability of almost 99%, the Fed will not change rates in the next FOMC meeting on June 17th, but leave them in the current range of 3.5 to 3.75%. But of course, as our regulars know, the Fed may not really influence long-term yields all that much. And as for us, personally, we hold it with the market in a way. We fear for the worse, but we hope for the best. That said, at the end of the day, our prediction is that the first scenario, a continuation of the current standoff, may be the most likely scenario in the foreseeable future. So we're not really changing our strategy, but rather sticking with the current plan for the time being. Although, truth be told, the time horizon for what foreseeable future means may be even shorter than normal in the current foggy environment. In any case, that's our perspective. Drop a comment below and let me, Marcus, and everyone else know which of the three scenarios that we just discussed do you think is most likely? And have you picked up some longer dated bonds, or are you holding out for higher rates? And if you want to continue comparing notes, sharing the best rates, and exchanging perspectives on a regular basis with a community of like-minded savers and investors, remember today is the very last day of our spring sale. Visit our website at www.dimonestic.com and use coupon code INCOME2026 to get $100 off of our private VIP investment club or this bond course bundle. I've also linked everything below this video for your convenience. And let's move on now to the next part of today's discussion. Where can you get up to 5.47% rates for the base part of your portfolio? So, for those of you who are laddering treasuries and multi-year guaranteed annuities in the base part of your portfolio for a safe, stable, and predictable income stream that hopefully lasts a lifetime. Here are some illustrative sample myga rates from two insurance companies that we work with, an A rated one and an A plus rated one. Remember that AAA is the best credit rating that an insurance company can get from AM Best, meaning the Migas from the A insurance company that we're about to share with you are the lowest risk, making them the most comparable to Treasuries in terms of risk return profile. An A plus is the second best credit rating that an insurance company can get from AM Best. So still very safe in the overall big picture, generally speaking, but maybe not as safe as Treasuries, especially if you were to go above the protection limits of your state guarantee association. In this top section, we'll go through what the numbers look like for an A insurance company. And in this bottom section, we'll go through what the numbers look like for an A plus insurance company. Here you have the investment amount required. And here you have the guaranteed myga term from two year all the way up to seven year for the A insurance company. And for a three-year myga, five year myga, and seven year myga for the A plus insurance company. Rates on the two year, three year, four-year, and five year mygas are the same as last week from this A double plus insurance company. And rates on the six year and seven year mygas are up again this week by another five basis points. So for example, if you were to purchase a $10,000 seven-year myga at the time of this taping from this A double plus carrier, your rate might be 4.7%. A $50,000 seven-year myga might earn you 4.8%. A $100,000 seven-year myga might earn you 4.95%. And a $1,000 seven-year myga might earn you even 5%. And if you have more than the amounts shown here, say north of $10 million, your rate might go as high as 5.1% with this A double plus insurance carrier this coming week. As always, keep in mind that the myga rates in this table are illustrative and subject to change at any time without prior notice, and that your personal rate is not fixed before you sign your annuity contract. For the A plus insurance carrier, the rates are higher across the board, as you can see here. You may be able to get to 4.75% even with a $10,000 myga purchase if you have a time horizon of seven years. And with $100,000, you may be able to get to 5% with a three-year myga, 5.15% with a five-year myga, and even 5.25% with a seven-year myga. Higher risk, higher return, right? But as I always say, everyone's financial journey is different, and an A-rated insurance company is still the second best credit rating that an insurance company can get from AM best, as I mentioned earlier. Always stay under your State Guarantee Association's threshold, and don't forget that mygas are generally not very liquid and they don't pay regular interest. So if any of these rates are interesting to you, or if you want to see what your myga options might look like whenever you're watching this video, email us at jennifer at diamondestic.com so that we can connect you with our trusted annuity specialist who can help you find the best annuity that's out there for you. And for those of you who've recently reached out to us about the up to 9.65% special booster or teaser rate for year one on this six-year myga with an A-rated insurance company that we shared with you earlier this month. Yes, this bonus offer is still running as of the time of this taping on May 15th, 2026. So, for example, if you were to invest $250,000 into a six-year myga here, your booster or teaser rate for year one might be 9.65%. And your base rate for years two through six might be 4.65%, giving you an average annual yield over six years of 5.47%, and an ending value at maturity of about $344,068. I've linked a video about this MIGA in the description below for those of you who want more details or need a refresher. Now, if you're looking for a safe and guaranteed 5% plus return on your money with principal protection when held to maturity, but perhaps you want to go above the protection limits of your state guarantee association, or maybe you don't like the general illiquidity of migas, because remember, one of the main reasons why mgas usually pay more than treasuries is due to the fact they are not liquid like treasuries. So let's take a look at treasury yields from this past Friday across all the maturities that the Treasury issues at auction. This row shows where they closed out the week on May 15th, 2026. This row here shows the increase or decrease in rates over the past week. And this row here shows the increase or decrease in rates since January 2nd, 2026. Increases in rates are shown in green and decreases in rates are shown in red. As we already discussed, yields for all longer maturities have gone up steeply over the past week. And it's not just the record setting 5.12% for the 30 year or the 5.14% for the 20-year that we talked about already. The two-year at 4.09%, for example, is up even the most since the beginning of the year by 62 basis points. And if we want to take a glasses half-full approach here, notwithstanding the current uncertainty about the future outlook, we now basically have a normal yield curve again for our treasuries, where longer maturities yield more than shorter maturities. A normal yield curve is usually interpreted as a bullish sign that the market expects economic growth and maybe a bit of inflation. We can't see into the future here at Diamond Nesteg, but the SP 500 did reach a new all-time high above 7500 as well last week and has stayed close to that level despite falling back a bit on Friday. So as it stands, the equity markets at least seem to be in an optimistic or maybe even bubbly mood. Only time will tell though. Markets can turn quickly if something happens, as we discussed before in our three scenarios for the US and Iran. Keep in mind that these numbers give you a general feeling for where rates currently stand along the maturity spectrum. The yields that you may get when you buy at a specific auction or from a specific broker or when you sell will likely differ a little bit from what's shown here. You can find more details on these treasury rates for any day of the week that the bond market is open on the Treasury's daily Treasury Par yield curve rates page. All sources are linked below in the first pinned comment. And if you're interested in continuing the conversations with me, Markets, and our Diamond Nestec VIP members on other safe ways to generate additional income in 2026 beyond what Treasuries and annuities can pay, either via international bonds, high-yielding bond funds, covered call strategies, preferred shares, and other investment vehicles. Remember that today is the very last day of our spring sale. Visit our website at www.diamondnestic.com and use coupon code INCOME2026 to get $100 off of a private VIP Investment Club membership. I've also linked everything below this video for your convenience. Our Diamond Nestic VIP Investment Club is the ideal place for you if you want to one have an extra pair of eyes for critical investing questions. Two, get ready for the retirement decisions that lie ahead for yourself or loved one. Three, understand how a product works, its benefits, and its risks. Four, be the first to know about safe andor higher yielding investments. Five, spot and clearly understand new market trends and issues. 6. Exchange perspectives with a like-minded community. And or seven, continue your lifelong learning about investing and retirement. Bringing us nicely to the next part of today's discussion. What are the predicted yields for the upcoming week's Treasury Auctions? If we go to Treasury Direct's upcoming auctions page, we can see that the 13, 26, 6, 17, 4, and 8 week T-Bill auctions are happening as usual. And if we scroll down, we can see that the 20-year T-bond and the 10-year tips are also on the auction schedule this coming week. The 10-year tips is a reopening auction, so we already know the coupon on that. At the time of this taping on Fidelity's platform, here's where the expected yield stand for the T-bills that have been announced already. The 6 week at 3.645, the 13 week at 3.654, and the 26 week at 3.684. For the 20-year T bond, the expected coupon is 4.875, and the expected yield is 5.199. So even a bit higher than the 5.14% from close on Friday that we discussed before. For the 10-year tips, the coupon is 1.875, and the expected yield is 2.065. For those of you who are interested in tips as part of a laddered strategy for the base part of your portfolio, do note that last week was the first time that the 10-year tips crossed 2% since April 1st, and this is higher than the average real yield over the past five years of between 1.22% and 1.94%, and more than double the current I bond fixed rate of 0.9%. So if you're comfortable with tips and are looking for inflation protection, this may be something to take a closer look at. Remember though, that whereas I-bonds are pretty much straightforward, tips like annuities can get complex, especially if you need or have to sell those tips before maturity. That said, for the right investor who's willing to invest a bit of time to understand them, they may be worth the effort, as both tips and annuities offer something that's not easily available from other investments. Bond beginners, folks, please refer back to these two modules here on tips and I bonds for refresher. The break-even inflation rate on the 10-year tips was 2.49% at the close of market on Friday, which is a fair bit higher than the average break-even inflation rate of between 2.3% and 2.36% over the past five years. As a reminder, the latest consumer price inflation report from the BLS, the US Bureau of Labor Statistics, showed annual inflation coming in at 3.8% overall at the end of April, and core inflation coming in at 2.8%. So if the 10-year TIPS fits your timeline, goals, and expectations, and you believe that inflation over the next 10 years will average more than 2.49% annually, and you're comfortable with the complexity, overall lower liquidity, and tax nuances of tips, then this may be an auction to consider dollar cost averaging into. Please also keep in mind that all of these numbers can and usually do change, all the way up to the time of the auction. And as we often say, everyone's financial journey is different. So if you're interested in continuing your money and investing discussions in a more private, trusted setting with me, Marcus, and our VIP members, remember that today is the very last day of our spring sale. Use coupon code INCOME2026 at checkout to get $100 off of our private VIP Investment Club membership before midnight tonight, Monday, May 18th. Visit our website at www.diamonestic.com and click on this yellow private VIP Investment Club button to learn more, or this bond course bundle button if that's what you're more interested in. I've also linked everything below this video for you. Alright, Diamond Estic members, Super Savers and Course fans, I hope you enjoyed today's video and learned something new. And see you again very, very soon with more brand new wealth building content for your financial journey.