10-Year Treasury Yield Hits 5.33%, Highest Since 2002, as Global Bond Selloff Deepens

The benchmark 10-year U.S. Treasury yield climbed to 5.3338% on Thursday, its highest level since April 2002, as a global selloff in government debt extended into quarter-end, according to CNBC, citing LSEG data. The move capped what Seeking Alpha described as the U.S. bond market's worst quarter this century.

Thursday's Move Across the Curve

The 10-year yield rose 4 basis points on the session to 5.3338%, breaching a level not seen since April 2002, CNBC reported. The 30-year Treasury bond yield jumped 3 basis points to 5.6702%, its highest level since July 2002. The 2-year yield, more closely tied to near-term Fed policy expectations, was 2 basis points higher at 4.91%, leaving the front end of the curve well below long-dated yields.

Worst Quarter This Century

Seeking Alpha reported that the 10-year yield rose 87.1 basis points over the quarter, part of what it characterized as the U.S. bond market's worst quarterly performance this century, as the Treasury selloff pushed yields to two-decade highs with traders bracing for higher-for-longer interest rates.

A Global Repricing

The selloff was not confined to U.S. markets. Government borrowing costs rose around the world on Thursday, continuing a months-long trend as investors expressed concern over a lack of political action to address fiscal deficits, while inflation remained sticky and interest rates climbed, CNBC reported. In a parallel move highlighted by CNN, the 30-year UK government bond yield hit 6% on Thursday for the first time since 1998.

CNN reported that debt concerns have weighed on the bond market broadly, as government spending from both political parties in the U.S. is seen by some market participants as putting the country on an unsustainable fiscal path. Investors have also been demanding higher rates at government bond auctions as inflation rises, and CNN reported that higher yields have not yet drawn enough buyers back into the market, a dynamic that has kept pushing yields higher.

What's Attributed to the Selloff

CNN attributed the move to a combination of factors it called counterintuitive: a U.S. economy that is strong, supported by heavy AI-related spending; inflation pushed higher by rising fuel costs; and expectations that the Federal Reserve will continue raising its target rate. A stronger-than-expected GDP report released Wednesday, along with an inflation report showing prices running well above the Fed's target, preceded Thursday's move, according to CNN. The outlet also reported that Friday's September jobs report is expected to show unemployment holding at 4.1%, a level economists describe as full employment.

CNN reported that bondholders are pushing yields higher in anticipation that the Fed will continue raising its target interest rate at its meeting later this month. That characterization reflects CNN's own reporting rather than confirmed Fed guidance, and should be read as a market expectation rather than a settled policy outcome.

CNBC separately reported that Treasuries have increasingly moved in lockstep with oil prices, which have been turbulent amid the U.S. and Israel's war with Iran disrupting Middle East crude exports. Brent crude was trading above $100 a barrel on Thursday, CNBC reported.

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