US 10- and 30-year Treasury yields hit 24-year highs as global bond sell-off deepens
In short
Yields on 10- and 30-year U.S. Treasury bonds hit 24-year highs on Wednesday, with the 10-year reaching 5.36% and the 30-year 5.73%, as a global bond sell-off deepened. Yields eased later after a strongly bid $39 billion auction of 10-year Treasury debt. Government bond yields also rose sharply in Europe, and U.S. and European stocks fell.
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Yields on key U.S. Treasury bonds touched fresh 24-year highs on Wednesday as a global bond sell-off picked up, NBC News reported. The 10-year Treasury yield rose as high as 5.36% and the 30-year yield hit 5.73%, the highest levels for each since 2002. The Hill reported the same peaks, saying the 10-year note topped 5.36% — its highest since April 2002, when it reached a closing peak of 5.48% — and the 30-year exceeded 5.73%, also its highest since April 2002. Reuters, reporting earlier, said the 30-year yield had hit a fresh 24-year high. [ 1 , 2 , 3 ]
Both yields retreated later in the day. U.S. bond yields pulled back following a Treasury Department auction of $39 billion worth of 10-year bonds, for which NBC News reported strong demand; at 5.3%, the yield on the auctioned bonds was the highest of any U.S. government sale of 10-year debt since November 2000. “Bottom line, for whatever reason, likely the 24 yr highs in rates, brought out the buyers and resulted in a great auction,” wrote Peter Boockvar, chief investment officer at One Point BFG Wealth Partners, according to NBC News. The Hill said the two notes were trading below 5.32% and 5.69% as of lunchtime, still about 4 basis points above Tuesday's close. [ 2 , 3 ]
The move was part of a global sell-off in government debt. Benchmark bond yields in France and Italy also rose sharply, and the yield on the U.K. 30-year government bond hit its highest level since 1998, NBC News reported. The Hill said investors fled the market amid mounting government debt and high oil prices due to the wars in Iran and Ukraine, and cited Mohamed El-Erian, who chaired former President Obama's Global Development Council, writing that France's 10-year bond yield is “leading a regional rise that increasingly reflects a two-way dynamic with US Treasuries.” [ 2 , 3 ]
Equity markets followed the yield move. The bond rout sent stocks tumbling early in the day, but losses among the major indexes eased as the decades-high yields came down; after notching record highs on Tuesday, both the S&P 500 and Nasdaq were down about 0.3% in afternoon trading, NBC News reported. European markets that closed earlier were lower: the Stoxx 600 ended down 1%, benchmark indexes in France and Germany closed down around 1.3%, and Italy's FTSE MIB slid 2.5%. Brent crude declined 0.5% but was still trading at more than $100 per barrel. [ 2 ]
The Hill reported that the Federal Reserve raised rates last month for the first time since July 2023, lifting the federal funds rate to between 3.75% and 4%, with inflation still above its 2% target, and that the Fed was due to release minutes of that meeting later Wednesday ahead of an FOMC gathering in the final week of October. It said rising yields point to higher borrowing costs for Americans, with the average 30-year mortgage rate at 7.52%, its highest mark since November 2023. NBC News reported that the recent rise in bond yields compounds the pain for governments whose borrowing costs have soared since the start of the year, and that IMF chief Kristalina Georgieva warned overnight about the situation. [ 2 , 3 ]
Why it matters
Higher Treasury yields feed into borrowing costs across the economy, including the 30-year mortgage rate, which one outlet put at 7.52%. The move is global: rising sovereign yields in France, Italy and the U.K. point to pressure on government finances, a theme the IMF chief also raised, according to NBC News.
Key facts
- The 10-year U.S. Treasury yield rose as high as 5.36%, its highest level since 2002. [ 2 , 3 ]
- The 30-year U.S. Treasury yield hit 5.73%, also its highest since 2002. [ 1 , 2 , 3 ]
- A Treasury Department auction of $39 billion in 10-year bonds drew strong demand, at a 5.3% yield — the highest of any U.S. 10-year sale since November 2000. [ 2 ]
- Both notes pulled back from their highs, trading below 5.32% and 5.69% as of lunchtime, about 4 basis points above Tuesday's close. [ 3 ]
- Government bond yields also rose in Europe, and the U.K. 30-year yield hit its highest level since 1998. [ 2 , 3 ]
- The Federal Reserve raised rates last month, to a range of 3.75% to 4%, its first hike since July 2023, and was due to release minutes of that meeting on Wednesday. [ 3 ]
- The average 30-year mortgage rate stood at 7.52%, its highest mark since November 2023. [ 3 ]
Confirmed by several sources
Still unclear
- Whether the bond sell-off has run its course after yields retreated from their morning highs. NBC News and The Hill both described the pullback, but neither said the move had ended.
- The U.K. 30-year government bond yield hitting its highest level since 1998. Reported only by NBC News.
- The content of IMF chief Kristalina Georgieva's overnight warning about government borrowing costs. Mentioned only by NBC News, whose article text is truncated at that point.
What local media are saying
Timeline, local time
- Reuters reports the U.S. 30-year bond yield has hit a fresh 24-year high. [ 1 ]
- NBC News reports the 10-year yield rose as high as 5.36% and the 30-year hit 5.73%, both the highest since 2002, as a global bond sell-off picked up. [ 2 ]
- The Hill reports the 10- and 30-year yields holding near 24-year highs, with the notes trading below 5.32% and 5.69% by lunchtime. [ 3 ]