10-Year Treasury Yields Hit 3.1%; Is The Bond Rout Accelerating?

Not so long ago global cash seeking safety and liquidity was keeping the yield on the 10-year Treasury at 2.95% in spite of the huge budget deficit resulting from the December Tax Cuts & Jobs Act and the flood of bond sales by the U.S. Treasury and the prospect of more interest rate increases from the Federal Reserve.

Bond prices fell only grudgingly and yields ever so slowly climbed over 3.00%.

But now in the last two days 10-year Treasury yields have tacked on almost a full tenth of a percentage point–9 basis points to be exact–and today the yield on the 10-year Treasury closed at 3.10%.

It’s still extremely likely that yields will climb only very gradually–the Treasury market is a huge market and it moves only slowly–but it looks like the yield on the benchmark 10-year Treasury is headed toward the 3.25% level that many Wall Street economists have flagged as a danger zone for U.S. stock prices. (The 10-year Treasury is a benchmark used to set the rate on other instruments, such as 30-year mortgages.)

The yield on the 2-year Treasury, which is more sensitive to moves by the Federal Reserve than the 10-year note, climbed to 2.59% today, up 1.29 percentage points in the last 12 months.

On the rise in bond yields gold fell by 0.3% to $1287.24 an ounce, the lowest level in 20 weeks.