Long bond yields reach multi-decade highs as the selloff spreads

US Treasury daily par yield curve data shows the 10-year yield rising from 4.78% on September 4 to 5.29% on September 30⁶. Tekedia reported the global bond rout deepening with the US 10-year hitting 5.34%⁷. A weekly market summary described yields across short and long tenors as anchored near 20-year highs after weeks of heavy selling⁸. BusinessToday Malaysia reported Treasury yields easing only after the 10-year hit its highest level since 2002¹². AllianceBernstein wrote that yields on long bonds have risen to multi-decade levels¹⁰.

Why it matters to investors

The repricing is reaching households. The weekly average 30-year fixed mortgage rate was 7.28% as of Thursday, Freddie Mac reported, up 0.25 points from the previous week and 0.94 points from a year earlier⁴. The Wall Street Journal called it the largest weekly increase in four years and tied the move to the bond-market rout³. Axios noted that mortgage rates closely track 10-year Treasury yields, which have risen by over 1.25 percentage points since the start of the Iran war in February⁴. Mortgage applications are plunging, which Axios said risks deepening the freeze in a housing market already slowed by thin inventory⁴.

Fund investors have taken the other side of the same move. Morningstar reported that fixed-income markets swooned in the third quarter as a surge in interest rates across the Treasury yield curve drove bond prices down¹¹. The same move that cut bond prices lifted the cost of a mortgage by roughly a quarter of a point in a single week, which is the transmission channel to watch^3,4.

What to watch

The Journal’s view is that oil prices are driving rates higher but government indebtedness is a key risk factor behind the global selloff^1,2. In Europe, UK, Greek and Italian yields climbed while France remained at the epicentre of the storm after a proposed budget failed to quell investors’ anxiety⁵. In Japan, the 30-year yield rose to 4.21% and the 40-year to 4.275%, while the 2-year eased to 1.92% and the 5-year to 2.365%, steepening the curve⁹.

AllianceBernstein frames the choice ahead as one between a bond market crisis and yield curve control¹⁰. Minneapolis Fed President Neel Kashkari said further rate increases would likely be needed to restrain the economy going into 2027¹². Those two positions mark out the range for long rates from here^10,12.