4.677% last I saw.
From Barron's, January 7:
Bond Selloff Accelerates. 5% Yields Loom, Forecaster Warns
The 10-year yield closed at 4.616%, after hitting an intraday high of 4.639%, not too far away from the high seen in May of last year.
Investors have been dumping bonds with longer maturities, pushing Monday’s yields to their highest levels in months. Wall Street predicts even higher yields ahead.
The 10-year yield closed at 4.616%, after hitting an intraday high of 4.639%, not too far away from the intraday high seen in May of last year. The 30-year bonds closed at a 4.836% yield, the highest yield seen in about 14 months. Returns on both assets have climbed by more than 40 basis points over the past month.
Rising yields spell trouble for existing bondholders because they indicate more investors are selling than buying in the market, which drives overall bond prices lower. Yields and bond prices move in opposite directions.
The Treasury Department is getting ready to sell $39 billion worth of 10-year notes and $22 billion in 30-year bonds on Tuesday and Wednesday, respectively. The sales are happening a day earlier than initially forecast due to an early market close on Thursday to recognize the national day of mourning for former President Jimmy Carter.
It is “skewing the supply events toward the first half of the week and justifying a heavier trading tone at the moment,” wrote Ian Lyngen from BMO .
To be fair, auctions and the change in schedule, which was communicated by the Treasury on Jan. 2, can’t be solely held responsible for the rise in yields on Monday. Rather, the selloff mostly stems from fundamental factors in place since the election, which are now receiving more attention.
With two weeks left to President-elect Donald Trump’s inauguration, concerns about Trump’s proposed tariffs have intensified.
Trump denied a Washington Post report on Monday that stated Trump’s aides could be considering limiting the tariffs. Tariffs are broadly said to increase inflation and reduce the spending power of the fixed payments bond investors receive.
He said in a Truth Social post on Monday that the article “incorrectly states that my tariff policy will be pared back. That is wrong.”
That has allowed yields to creep higher.
Besides tariffs, the bond market is also worried Trump’s campaign proposals, such as tax cuts and eliminating taxes on tips and Social Security benefits, raise the prospect of more government borrowing to make up for the revenue shortfall and would increase the federal deficit.
Trump’s proposals are expected to raise the national debt by $7.8 trillion over the next decade, the nonpartisan Committee for a Responsible Federal Budget estimates. J.P. Morgan
expects the Treasury to ramp up debt issuance starting in November 2025.“Finally, nothing about this administration (despite Department of Government Efficiency) points to it being fiscally conservative, so that too will weigh on bonds,” wrote Peter Tchir, head of macro strategy at Academy Securities, on Sunday.
Tchir raised his near-term target on the 10-year note yield to 4.75%, more than the levels seen in April of last year.
Jim Bianco, president of Bianco Research, forecasts a 5.23% average on the 10-year yield in his note on Monday, even bigger than the high the market saw back in 2023. His forecast assumes inflation moves to 3% over the long term....
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