Here’s how the rise in the 10-year Treasury yield stacks up relative to history Yields in the global bond market have risen with startling speed over the past few months, and the more than $30 trillion market for U.S. government debt certainly hasn’t been immune. A challenging brew of catalysts — from the ongoing war in Iran to signs of resurgent economic growth in the U.S. and abroad, along with the immense sums being borrowed to finance the artificial-intelligence build-out — have come together to drive U.S. Treasurys to what could be their worst quarterly performance in a generation, by one measure.
The yield on the 10-year Treasury note , widely seen as the market’s benchmark, on Wednesday locked in its biggest quarterly increase since the first quarter of 1994, according to Dow Jones Market Data. Bond market prices move inversely with yields. The rise in yields this quarter surpassed the upswing seen in the third quarter of 2022, when aggressive interest-rate hikes by the Federal Reserve to battle surging inflation led to painful losses in the bond market that year.
Yields on longer-dated Treasury notes and bonds have recently traded at their highest levels in decades. The 10-year yield on Wednesday settled at its highest level since 2002. Don’t Short Yourself offers weekly money tips to help you earn it, stack it and grow it.
I would like to receive updates and special offers from Dow Jones and affiliates. I can unsubscribe at any time. Investors have highlighted other factors that might be contributing to the move as well, including worries about stubbornly high U.S. budget deficits, and even the unwind of the Japanese yen carry trade.
The rate on the 10-year Treasury is closely watched, as it influences the cost of trillions of dollars in borrowing for consumers, companies and the U.S. government. It’s going up at the same time that inflationary pressures persist in the U.S. economy. Earlier this month, the Federal Reserve raised its policy interest-rate target for the first time in three years, with more rate hikes expected in the months ahead.
That should help keep the pressure on bonds, as the Treasury yield curve threatens to invert once again. **See:**He’s been badmouthing Treasury bonds since 2020, but ‘the big fat cushion’ of 5.25% yields is turning this strategist bullish Even an official inflation report on Wednesday that came in slightly softer than expected wasn’t enough to calm the tumult in the bond market. While long-dated yields fell after the data were released, the decline didn’t hold. While a recent jump in diesel prices heightened concerns that the resulting higher cost of transporting goods and food would fuel broader inflation in the U.S., those fears may be overblown in the near term, Will Kinlaw, State Street’s head of data intelligence and market research, told MarketWatch in an interview.
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