The big news this week was the continued push higher in Treasury yields. The 10-year yield jumped 19 basis points and finished just 3 basis points below the October 2023 high of 4.99%. What matters most is not the absolute level of Treasury yields, but their direction over time. Interest rates have been moving higher for an extended period, and that trend continues to put upward pressure on the cost of capital.
In fact, the benchmark 10-year yield is on track to record its 74th consecutive month above its two-year low, a stretch not seen since 1967, when yields were entrenched in a secular uptrend.
In the decade before the September 2022 breakout in the 10-year yield—a higher high that signaled a trend change—the benchmark yield averaged just 2.06%. Since that breakout, it has averaged 4.17%.
That difference matters. If the 10-year yield continues to rise—or simply remains elevated—the average cost of capital will continue to increase, affecting everything from consumer loans and mortgages to corporate borrowing. For those refinancing or issuing debt, today’s interest-rate environment is materially different from the one that prevailed for most of the decade before 2022.
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