What the 10-Year Yield Did After Rising on 18 of 24 Days

The 10-year Treasury yield rose on 18 of the last 24 trading days, closing at 5.29% on Sept. 30. Since 1965, that has happened only 11 other times.

A year later, the 10-year was lower in seven of them, by an average of 0.46%.

This move isn't coming from inflation, expected inflation barely changed. The real yield, what a bond pays above inflation, rose to 2.93%, which is the highest since 2008.

A bond held to maturity locks in the yield it was bought at, no matter where rates go next. Cash and short-term bonds don't. Their yields reset, and if rates fall, so does the income.

The trade-off is price. If rates keep rising, a long bond loses value in the meantime, which is what happened four of those 11 times. But investors haven't been paid this much above inflation in almost 18 years.

Until next week,
Jacob