The Treasury Department has been auctioning off a lot of long-term government debt this week. It held an auction for 30-year bonds Thursday, June 11, after selling off a batch of 10-year T-notes on Wednesday.These auctions give us a look at the interest rate investors want to be paid in exchange for lending the government money for years or even decades.U.S. Treasurys are the gold standard for government debt. Investors from around the world always show up to Treasury auctions to load up on bonds.But every time, the question is: How much yield are they going to demand for their money?“It all comes back down to compensation. Are you going to get compensated for owning a security above the inflationary expectations?” said Lawrence Gillum, chief fixed income strategist with LPL Financial.He said investors are worried that prices will keep rising over the next few years and eat up whatever interest they get on those bonds.“So the higher the inflation, the lower your actual, call it ‘real’ return, that you’re going to get from the fixed income markets,” Gillum said.As a result, investors have been demanding higher yields on short-term government debt. Yields on two-year Treasurys have risen more than a full percentage point since the Iran war started. That’s likely because investors expect the Federal Reserve to tamp down inflation by hiking interest rates, said Zachary Griffiths with CreditSights.“That is a truly dramatic shift from what we saw at the start of the year, and that’s driven by inflation concerns,” he said.But yields on long-term government debt — as in, 10- and 30-year bonds — haven’t risen so quickly.Griffiths said one reason is rate hikes have long-term consequences.“A higher policy rate environment rate environment in the near term, that does increase the risk that you have a more notable downturn in economic growth from the 10-year perspective, versus a two-year perspective,” he said.Another factor keeping a lid on long-term yields is the expectation that the Strait of Hormuz will eventually open again.“It’s a question of time, it’s a question of when. But the broad consensus is certainly that’s what’s going to happen,” said John Canavan, lead market analyst at Oxford Economics.Canavan said when it does, inflation will cool.“Optimism among market participants, that that will happen, has also limited the extent of the rise in long-term yields,” he said.But there are still some big factors that could push long-term yields higher, Canavan said. Namely, the national debt: “Longer term, the drumbeat of deficit risks will just continue to grow louder and louder in the background,” he said.Which will put more upward pressure on long-term rates, even after inflation concerns go away.