Yields Set Records on Inflation and Rate Concerns

US Treasury yields climbed sharply on Wednesday, with the 30-year bond reaching 5.7041%, its highest closing level since 2002. The 10-year yield rose to 5.307%, up 3 basis points, while the 30-year added 4 basis points to 5.69% and the two-year gained 1 basis point to 4.801%. Markets had already pushed the 30-year yield above 5.7% at one point, and the 10-year touched levels not seen since April 2002.

Investors cited worries over persistent inflation, rising energy prices, large government borrowing and potential risks from artificial-intelligence financing needs and war spending as factors keeping long-term yields elevated. The climb followed a period of six weeks when Treasury yields had moved higher on the back of those concerns.

Major 10-Year Auction Draws Strong Demand

The Treasury sold $39 billion in 10-year notes Wednesday, an amount that helped the 10-year yield rise modestly and limited some pressure on stocks. Officials described the sale as solid, with investors apparently finding current yields attractive enough to support demand despite the broader bond selloff.

That auction outcome provided a brief reprieve for equities as the market digested the data alongside the upcoming release of Federal Open Market Committee minutes later in the day.

Dow Falls Nearly 300 Points as Higher Rates Weigh on Banks

Wall Street closed lower Wednesday. The Dow Jones Industrial Average lost about 273 points, or roughly 0.5%, while the S&P 500 slipped 0.2% and the Nasdaq Composite fell 0.4%. Banks led the declines, with Goldman Sachs and Citigroup dropping nearly 2% each and Bank of America, Wells Fargo and JPMorgan sliding about 1% on fears that elevated borrowing costs would hurt lending activity.

Earlier in the day, US stock futures had dropped as much as 0.7% on the Dow, 0.3% on the S&P 500 and 0.6% on the Nasdaq-100, reflecting a cautious tone ahead of the Fed minutes.

Two Veteran Bond Bears Shift to Bullish on Long Treasurys

Even as yields hit 2002 highs, two longtime skeptics of US government bonds changed course this week. Anatole Kaletsky, co-founder of Gavekal Research, began favoring 10-year and 30-year Treasurys after advising investors since 2022 to avoid long-term debt in major developed economies. He now sees potential for US rates to ease again.

Jim Bianco, founder of Bianco Research, turned positive on long-term bonds for the first time in six years last week. He views current levels as attractive following the recent sell-off and notes they could serve as a hedge if economic conditions weaken sharply or stocks face a major correction.

Crypto Side of the Picture: Government-Linked Bitcoin Transfer

Separately, on-chain activity showed a US government-linked address moving 5,382.1 Bitcoin, valued at approximately $448 million, to Coinbase Prime. Over the prior 32 hours, the address had transferred crypto worth about $670 million, including the Bitcoin, $520 million in Bitcoin, $119 million in Tether and $31.63 million in BNB.

The movements came against the backdrop of rising US borrowing benchmarks, adding to the macro focus on how elevated Treasury yields are influencing broader markets and digital-asset flows.

Fed Minutes Expected to Add Detail on Policy Path

Minutes from the Federal Reserve’s September meeting, where policymakers raised interest rates for the first time since 2023, are set for release at 2 p.m. ET. The document is expected to offer more insight into officials’ assessments of monetary policy during that session.

With the auction already concluded and the minutes still to come, traders will watch for any shifts in the central bank’s tone that could influence the direction of yields in the days ahead.