Treasury 10-Year Yield Breaches 5% for First Time Since 2007
- Fed interest-rate hikes and swelling supply erode bond prices
- Treasuries remain on course for third straight annual loss
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Treasuries rallied, bouncing back from a slide that took the 10-year Treasury yield beyond 5% for the first time in 16 years, as investors start to question whether the economy can withstand current interest rates.
The yield rose as much as 11 basis points to 5.02%, the highest since 2007, before erasing its increase and falling as low as 4.83%. It climbed from below 4% as recently as Aug. 10 as investors embraced the view that the Federal Reserve will keep its policy rate elevated indefinitely, until inflation returns to its 2% target.