The 10-year Treasury presses 5 percent as buybacks meet a record borrowing quarter

The yield on the benchmark 10-year US Treasury note rose to 4.97 percent on Friday, up a full percentage point since the end of February and only a hair below its high since 2007⁶. A wave of bond selling has pushed the yield close to that mark³. Bloomberg reported that a 5 percent Treasury yield is raising new risks for markets and the economy².

Yields edged lower on Monday but remained close to recent multiyear highs as a Federal Reserve rate hike this week looked increasingly possible, while the German 10-year Bund yield hit a new 15-year high⁷. Forex Factory noted that Treasury Secretary Scott Bessent’s interventions to suppress interest rates have been followed by yields surging higher¹.

Why it matters to investors

The rate on a 30-year fixed-rate mortgage has risen in lockstep, reaching 7.08 percent on Friday according to Mortgage News Daily, the highest in more than a year⁶. Axios described a toxic mix of near-term inflation pressure and years of fiscal imbalance, with an inflation report the immediate catalyst⁶.

The fiscal arithmetic behind the move is not in dispute. For the first 11 months of this fiscal year the federal budget deficit reached $1.97 trillion¹³. The government has collected $4.8 trillion and spent $6.8 trillion in 2026, with interest payments on the debt up 12 percent¹⁴.

What to watch

Bessent announced a $6 billion buyback, triple the normal amount, and doubled the size of a further operation⁵. TS2 reported that the offer met a $739 billion borrowing quarter and that the yield curve did not read it as debt relief, with the official Treasury par yield curve showing the move from September 9 to September 11⁴. Finshots noted he had signalled larger buybacks to help tame yields that feed borrowing costs across the economy¹¹.

Societe Generale argues the buyback test exposes the limits of support for long-term debt, with consequences for long-term yields, the shape of the curve and mortgage rates¹². Barchart flagged an $80 billion Treasury shift as a possible warning for US bonds⁸. Bessent himself has said the bond market ‘has taken down more governments than howitzers’^9,10, and Fortune reported he has signalled that the White House is cautious about pushing too hard in defiance of it¹⁰.