Treasury Market Comes Out of Denial, Grapples with “Higher-for-Longer,” QT, Flood of New Issuance. Long-Term Yields Jump

Wolf Street | July 8, 2023

The 10-year yield closed at 4.06% on Friday, the highest since early March, when it went to 4.08%, at which point the Fed’s intervention to halt the bank-panic unleashed a massive rally in all kinds of assets, including longer-term bonds, on the fervent hopes that this would be the beginning of QE all over again. It knocked the 10-year yield back down to the 3.3% range. But that rally in longer-term bonds has been replaced by a selloff, and yields have shot higher.

The last time before this rate-hike cycle that we saw a 10-year yield of 4.06% was during the Financial Crisis in 2008, when it was on the way down.

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