Why Term Premiums on U.S. Treasurys Have Been Rising

Marketplace, Aug. 4, 2026-Justin Ho

When investors buy long-term government bonds, they like to be paid some extra yield to convince them to lock away their money for seven, 10, or even 30 years. The extra premium that investors require to hold Treasurys over the long-term is known as a “term premium.” Over the last week or so, term premiums have been rising.

Investors want more compensation to hold long-term Treasurys right now for a couple of reasons, according to Guy LeBas with Janney Montgomery Scott.

“One is concerns about how much debt the so-called hyperscalers are going to have to issue in order to fund their capital spending, their expansion into AI data centers,” he said.

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