Elevated U.S. fiscal deficits exceeding 5% of GDP, combined with heavy Treasury supply and competing corporate issuance for AI infrastructure exceeding $700 billion annually, have driven the 30-year Treasury yield to approximately 5.25% as of September 4, 2026, lifting the term premium as the safety premium on long-duration debt diminishes. Persistent inflation above the Fed’s 2% target— with July PCE near 3.7% and sticky core goods and energy components—alongside a strong August jobs report showing 162,000 payroll gains, has shifted market-implied odds toward additional rate hikes at the September 15-16 FOMC meeting. Traders are monitoring upcoming CPI and PPI releases for confirmation of disinflation trends versus further tightening signals that could extend the recent climb in long-end yields.