U.S. 10-year Treasury yield rises to 5.01%, approaching key psychological level

On Monday, the U.S. 10-year bond yield rose to 5.01%. (Reuters photo)

[Financial Channel/Comprehensive Report] On Monday (14th), the 10-year U.S. Treasury bond yield climbed to more than 5%, hitting the highest level since October 2023, touching a psychological level that has attracted much attention. Analysts said this could have a knock-on effect on the U.S. economy and threaten the stock market bull run by weakening the relative attractiveness of U.S. stocks.

Reuters reported that yields soared as traders expected the Federal Reserve may need to keep interest rates higher for longer as soaring oil prices stoked concerns about renewed inflationary pressures. At present, price pressure has far exceeded the central bank's 2% target.

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On Monday, the U.S. 10-year bond yield rose 3.51 basis points to 5.01%.

A flood of debt issuance, including by companies to fund record AI-related spending, has further exacerbated the trend by increasing the supply of bonds available to potential buyers and limiting the prices sellers can demand.

Traders also continue to focus on the deterioration of U.S. fiscal conditions, with some arguing that Washington’s expanding deficit and rising debt burden will require higher yield premiums to continue to attract buyers. The U.S. economic growth outlook remains strong, which also supports this trend.

Some analysts see the 10-year Treasury yield hitting 5% as a critical tipping point that could make bonds more competitive with stocks and potentially pull money away from the stock market.

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