Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeInvestorU.S. 10-year Treasury yield breaches 5% as inflation, supply worries mountThe rise in the 10-year yield threatens to slow economic growth and weigh on equities that are trading at lofty valuationsAuthor of the article:U.S. Treasury Secretary Scott Bessent has tried to contain the rise in bond yields by purchasing Treasuries. Photo by Blake Fagan /AFP via Getty ImagesAn intensifying selloff in Treasuries pushed the U.S. 10-year yield above five per cent for the first time since 2023, as mounting inflation concerns collided with swelling government and corporate borrowing needs.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorThe yield rose as much as four basis points to 5.01 per cent on Monday. It last breached the five per cent level in October 2023, and only for one day.The rise in the 10-year yield, a benchmark borrowing cost for global government and corporate debt as well as U.S. mortgages, threatens to slow economic growth and weigh on equities that are trading at lofty valuations. Yields have kept rising despite United States Treasury Secretary Scott Bessent taking the unusual step of boosting buybacks of longer-dated bonds as the Trump administration seeks to keep borrowing costs in check.Canada's best source for investing news, analysis and insight.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Investor will soon be in your inbox.We encountered an issue signing you up. Please try againLess than two months before the U.S. midterm elections, the 10-year yield is now more than a full percentage point above its level before the outbreak of the Iran war. The conflict has sparked a surge in oil prices, adding to inflation angst. Those concerns were reinforced by hotter-than-expected consumer-price data for August, prompting traders to boost bets on U.S. Federal Reserve rate hikes starting as soon as Sept. 16.But the selloff also reflects deeper structural forces that have pushed up long-dated yields across major developed markets, with a gauge of global government borrowing costs rising to levels last seen in 2007. Investors are demanding greater compensation to hold long-term debt as governments and companies compete for capital amid widening fiscal deficits and a flood of issuance to fund artificial-intelligence infrastructure.“There are a lot of underlying factors that make for a sustained selloff in rates as the path of least resistance for now,” said Zach Griffiths, head of investment-grade and macro strategy at research firm CreditSights. Ten-year yields could rise toward 5.5 per cent, he said.The Treasury market has ballooned to about US$32 trillion from around US$4.5 trillion since 2007, pushing the federal debt to more than 100 per cent of U.S. gross domestic product. Fitch Ratings warned in August that the country is “vulnerable to future economic shocks” as debt levels grow.The last time the 10-year yield topped five per cent, in October 2023, it stayed there for only one day. Buyers quickly emerged as the U.S. labour market cooled and inflation eased, allowing the Fed to end its most aggressive tightening campaign in decades. By September 2024, the Fed began to cut rates.This time, a resilient labour market has kept investors focused squarely on inflation and the prospect that borrowing costs will remain higher for longer. Treasuries are now on course for their first annual loss since 2022.So far, the bond selloff has remained largely orderly, with volatility well contained. But Bessent has made clear his unease with the relentless rise in long-term borrowing costs.The former hedge fund manager has taken several unconventional and sometimes controversial steps aimed at bringing down yields, including opening the door, in traders’ minds, to reducing long-term debt issuance and taking measures seen as easing pressure on Japan to sell Treasuries.—With assistance from Masaki Kondo. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.