US Treasury 10y Yield

US 10-Year Treasury Yield

No single interest rate gets watched more closely than the yield on the 10-year US Treasury note (UST 10Y). You can ballpark the current yield with yield = annual coupon / current price × 100, but traders usually quote the yield-to-maturity (YTM), which discounts every future coupon along with the principal. The 10Y is the yardstick that mortgages, corporate bonds, sovereign debt, and equity discount rates everywhere get measured against.

Three things mostly push the 10Y around. First, where the market thinks the Federal Reserve’s policy rate is headed. Second, inflation expectations, read off the breakeven rates implied by TIPS. Third, the term premium, the extra you get paid for holding longer duration. The yield has covered a lot of ground over the years, from roughly 1% post-COVID in 2020 to 15% in the Volcker era of 1981; through 2024 it has hovered around 4–5%. If you want exposure, iShares 20+ Year Treasury Bond (TLT) gives you the long end and iShares 1–3 Year Treasury (SHY) the short.

Applications

Portfolio managers use it to set duration. Analysts subtract it from the S&P 500 earnings yield to get the equity risk premium. Mortgage originators watch it when they reprice 30-year loans, and recession watchers track its gap with the 2-year as the 2s10s spread. That inversion, where the 2Y tops the 10Y, has shown up before every US recession since 1969, and it returned from mid-2022 through 2024.

FAQ

Yield up means price down — why? The coupons on a bond are locked in, so when market rates climb, an older bond paying a smaller coupon can only match the new market yield by trading cheaper. Price falls as yield rises, and vice versa.

What is the 2s10s curve inversion? An inversion is when the 2-year yield ends up above the 10-year. It usually means investors are betting on rate cuts ahead because they expect growth or inflation to fade. People cite it more than any other recession signal, but the warning isn't precise: the lead time has run anywhere from 6 to 24 months.

Are US Treasuries really risk-free? Only in one sense. There's no credit risk in nominal dollar terms, since the Fed can always print more, but the interest-rate risk is real: TLT dropped roughly 50% from 2020 to 2023. Inflation eats into real returns too. If you want to hedge that part, TIPS cover the inflation leg.