US 10-Year Treasury Yield Hits Highest Level in Nearly 24 Years

The yield on the US 10-year Treasury bond rose to a range between 5.31% and 5.35%, its highest level in nearly 24 years, before pulling back to around 5.24% to 5.25% by the end of the session.

The 30-year bond yield exceeded the 5.65% to 5.68% range before easing to about 5.61%, reflecting continued pressure on long-term maturities, which are the most sensitive to changes in expectations.

This decline marked the US Treasury's worst quarter since 1994, after the 10-year bond yield rose 87.1 basis points during the quarter amid a broad sell-off that affected various maturities.

Federal Reserve officials are examining the sharp rise in long-term yields and its implications for markets and borrowing costs, at a time when investors are awaiting any signal on the direction of US monetary policy.

What do these terms mean?

Treasury bonds are debt instruments issued by the US government to finance spending, and their yield serves as a benchmark for pricing loans worldwide. A basis point is a small unit of measurement equal to 0.01%, so a yield rise of 87.1 basis points means an increase of about 0.87%. Long-term yield is the yield on bonds maturing after many years, and it typically rises with growing concerns over inflation, debt, or monetary policy tightening. When yields rise, existing bond prices fall because the relationship between them is inverse.