US 10-Year Bond Yield Surges 87.1 Basis Points, Biggest Move in 32 Years, Reaching 5.31%

Money & Banking··USJP·Read original
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Summary · why it matters

The US bond market faced heavy selling, with the 10-year Treasury yield climbing to 5.31%, the highest since 2007, and rising by 87.1 basis points in the quarter ending in September, the largest quarterly increase since 1994, according to data from LSEG. Meanwhile, the 30-year Treasury yield broke through 5.65%, the highest since 2002. The bond selloff was not confined to the United States, as debt markets worldwide came under pressure from rising energy costs, which fueled concerns that inflation could stay elevated longer than expected. At the same time, investment momentum in AI and data center construction continued to raise expectations for economic growth and long-term interest rates. In Japan, government bond yields rose by double digits for a fifth consecutive quarter, an unprecedented streak. Investors rushed to adjust their views on the direction of US monetary policy after the Fed raised rates in September. The market currently expects at least three more rate hikes by mid-2027. Andrew Lilley, chief rates strategist at Barrenjoey, an investment bank in Sydney, said the bear market in US government bonds was necessary after the economy entered a state in which underlying inflation is too high to be sustained, while the Fed has not yet responded adequately. He warned that the strength of other asset markets could come under pressure as bond yields remain high and attract more investment.

Impact on assets 4

Others▲ · 4 stocks
％Japan Government Bond 10Y
JP-10Y
▲ PositiveMonetaryrelevance

Japan government bond yields rose by double digits for a fifth consecutive quarter amid the global bond selloff.

％Effective Federal Funds Rate
EFFR
▲ PositiveMonetaryrelevance

Fed raised rates in September and market expects at least three more hikes by mid-2027, pushing the effective funds rate higher.

Off-coverage companies 1

BarrenjoeyPrivate± Mixed
relevance

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