The yield on the 10-year U.S. Treasury note moved above 5% this morning, reaching its highest intraday level since 2007. The move extends a climb that has lifted the benchmark roughly a full percentage point from its February low.
For context, the 10-year yield began 2026 at about 4.15% and briefly fell below 4% in February. It reached 4.5% in May and first touched 5% on September 14. The last sustained period near this level was the summer of 2007.
What is driving yields higher
Energy prices
Brent crude topped $101 a barrel on Wednesday. Elevated oil prices since the start of the conflict with Iran have fed directly into inflation expectations, and investors are watching ongoing talks between U.S. and Iranian officials in New York this week.
Persistent inflation
Consumer prices rose 3.4% over the 12 months ending in August, well above the Federal Reserve’s 2% target. New data this week showed U.S. business activity growing at its fastest pace since 2021, which adds to concern that price pressures may persist.
A tighter Federal Reserve
On September 16, the Federal Open Market Committee voted 12 to 0 to raise the federal funds rate by a quarter point to a range of 3.75% to 4%, its first increase since July 2023. The Fed’s updated projections point to the possibility of another increase this year, and Fed Governor Michael Barr said this week that further tightening is likely needed to bring inflation back to target.
Government borrowing
Heavy borrowing by governments worldwide is adding supply to bond markets. The Institute of International Finance reported Wednesday that global debt reached a record $365 trillion in the first half of 2026, and that advanced economies spent more than $3.5 trillion on interest payments over the prior 12 months.
What it can mean for investors
Higher yields cut both ways. Newly issued Treasuries, certificates of deposit, and money market funds are offering some of the highest income levels available in nearly two decades. At the same time, the market value of existing bonds declines as yields rise, and higher discount rates can weigh on stock valuations.
Disclosure
This material is provided by Gryphon Financial Partners, LLC (“Gryphon”) for informational purposes only. It is not intended as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy, or investment product. Facts presented have been obtained from sources believed to be reliable, though Gryphon cannot guarantee their accuracy or completeness. Gryphon does not provide tax, accounting, or legal advice. Individuals should seek such guidance from qualified professionals based on their specific circumstances.