U.S. 10-Year Treasury Yield at 4.78%, Possibility of Re-entering 5% Mentioned

As of September 5, the yield on the U.S. 10-year Treasury bond recorded 4.78%. The yield on the 30-year Treasury bond was reported at 5.24%. Wolf Richter noted that the 10-year yield has been zigzagging upward since mid-November last year, and that it has risen by 80 basis points since the Federal Reserve lowered the policy rate despite signs of accelerating inflation. The gap between the effective federal funds rate and the 10-year yield reached 115 basis points. The last time the 10-year yield exceeded 5% was on October 23, 2023, and the current 4.78% is close to that peak. The rise in long-term rates is also impacting the crypto market, with the 30-year Treasury yield increasing to 5.31%, raising the funding burden for Bitcoin. Mike Wilson warned that while rising rates based on strong economic indicators are not necessarily bad for the stock market, a rapid increase in long-term rates could raise capital costs and put pressure on valuations. The next FOMC meeting is scheduled for September 15-16.

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