Bonds

Surge in Treasury ‘Term Premium’ Warns of Rising Bond Risks

Key gauge rises to highest since November as bond rout deepens
Traders demand more yield on growth, deficit, election concern

While 10-year Treasury inflation expectations remain stable and below 2.5%, the bond market awaits next week’s latest Treasury forecast for debt sales over the coming quarter. — While 10-year Treasury inflation expectations remain stable and below 2.5%, the bond market awaits next week’s latest Treasury forecast for debt sales over the coming quarter.
Photographer: Stefani Reynolds/Bloomberg

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By Michael MacKenzie and Greg Ritchie

October 23, 2024 at 4:51 PM UTC

This article is for subscribers only.

The US Treasury market, already mired in one of its worst losing stretches of the year, is flashing a fresh warning sign of mounting risks as yields surge.

The so-called term premium on 10-year Treasury notes — an expression of the extra yield investors demand for owning the debt rather than rolling over shorter-term securities — has risen from near zero to just under a quarter point so far this month to the highest since last November, a Federal Reserve gauge shows.