The yield on the 10-year Treasury note climbed to a seven-month high on Monday, closing at 4.58%. This marks a 5-basis-point increase for the day, extending the bond market sell-off despite weak economic indicators.
Data Ignored: Consumer confidence fell in December, and durable goods orders pulled back more than expected, typically signals that might ease bond-market pressure. But these concerns weren’t enough to reverse the upward trend in yields.
Context and Key Numbers
- The 10-year Treasury yield has surged by 41 basis points since the start of December.
- It’s now up 20 basis points since the Federal Reserve’s latest decision to cut rates by 25 basis points earlier this month.
Why This Matters: The 10-year Treasury yield serves as a key benchmark for the 30-year fixed-rate mortgage. As yields climb, mortgage rates typically follow suit.
- According to Mortgage News Daily, the 30-year fixed mortgage rate has risen to 7.10%, adding pressure to a housing market already grappling with affordability challenges.
Bottom Line: The 10-year Treasury yield’s steady climb reflects broader concerns about the economy and monetary policy. If yields continue to rise, expect ripple effects across financial markets and consumer-facing sectors like housing.
