Sep 27, 2026 · 36 min
Why Treasury yields reached 5% and could climb further
Making Sense of Sky-High Treasury Yields
Long-term borrowing costs shape mortgages, corporate financing, bond portfolios, and the government’s ability to fund rising debt.
- 1Persistent inflation, resilient growth, and tighter Federal Reserve policy helped push the 10-year Treasury yield sharply higher.
- 2The yield reflects both expected future short-term rates and a rising term premium shaped by supply, demand, and investor preferences.
- 3Higher yields create opportunities in short-term Treasurys while exposing existing long-duration bondholders to mark-to-market losses.
Don't miss
Meghan Swiber explains why Treasury buybacks can remove illiquid older securities yet still fail to prevent yields from rising.
The brief
Alex Ossola frames why the 10-year Treasury yield reached 5%, with Miriam Gottfried, Sam Goldfarb, and Bank of America rates strategist Meghan Grant Swiber examining what comes next.
The rise reflects a break from the post-financial-crisis low-rate era: persistent inflation, aggressive Federal Reserve tightening, resilient growth, and greater market volatility.
Swiber separates the 10-year yield into expected future short-term rates and the term premium, showing how deficits, Treasury supply, demand, and portfolio shifts add pressure.
The conversation tests whether Treasury Secretary Bessent’s buyback program can support the market, and explains why buybacks did not stop yields from rising.
For investors, shorter-term Treasury bills and notes can limit duration risk, while existing long-term bondholders face mark-to-market losses before receiving principal at maturity.
The hosts consider whether the 10-year yield could reach 6%, linking that possibility to inflation, growth, Fed policy, government borrowing, and changing Treasury demand.
Miriam GottfriedMentioned
United States Department of the Treasury
Kevin Maxwell WarshListen to the full episode and explore every guest, topic, and moment on PodLume.