10-Year Treasury Yield Tops 5% for First Time in Nearly 20 Years

The yield on the 10-year U.S. Treasury note climbed above 5% this week, a threshold it has not crossed in almost 20 years. Treasury yields move opposite to bond prices, so the rise reflects investors demanding more compensation to hold long-term government debt. Higher long-term yields matter for stocks because they raise the discount rate used to value future corporate earnings, particularly for growth companies whose profits are expected years from now. A stronger dollar and rising yields were already flagged as a headwind in recent fund commentary circulating this week. What remains unresolved is whether this is a temporary spike tied to near-term inflation and fiscal concerns or the start of a longer period of higher borrowing costs. The last time yields sat near these levels, before the 2008 crisis, the macro backdrop was very different.