Treasury Yields Highest Since 2002 as Bond Selloff Extends

The selloff in U.S. government bonds reached a new milestone at the start of the week. On Monday, October 5, 2026, benchmark Treasury yields highest since 2002 became the headline across trading desks: the 10-year note closed at about 5.31%, a level last seen in April 2002, and the 30-year bond finished near 5.66%. Yields eased modestly on Tuesday, but the move has already reset borrowing costs for mortgages, companies and the federal government itself.

What happened

According to Dow Jones market data published by Morningstar, the 10-year yield rose 3.4 basis points on Monday to 5.310%, based on 3 p.m. Eastern values from Tradeweb. That was the highest yield since Tuesday, April 2, 2002, a new 52-week high, and the ninth rise in the past 10 trading days. The yield is up 1.158 percentage points since the start of the year and 1.358 points above its 52-week low of 3.952%, set on October 22, 2025.

Longbridge, citing Wallstreetcn data, put the New York close at 5.311%, with an intraday range of 5.2475% to 5.3472%. The same report said the 30-year yield rose about 4 basis points to 5.661% after touching 5.7017%, and the 20-year rose to 5.709%. The two-year yield barely moved, at about 4.83%, so the curve steepened: the gap between two-year and 10-year yields widened to about 47.8 basis points. Real yields climbed as well. The 10-year Treasury Inflation-Protected Securities yield rose to about 2.94%, and the 30-year TIPS yield reached a level that Bloomberg data show is the highest since records began in 2004, Longbridge reported.

The Treasury Department's own daily par yield curve confirms the picture: 5.31% for the 10-year and 5.66% for the 30-year on October 5, against 4.84% for the two-year. For October 6 the official curve shows a small pullback, with the 10-year at 5.27%, the 30-year at 5.64% and the two-year at 4.79%.

Why it matters

Long-term yields at these levels change the arithmetic across the economy. They set the floor for mortgage rates and corporate borrowing, raise the government's interest bill, and make bonds a more serious alternative to equities. "Investors are now dealing with meaningfully higher long-term rates," David Miller, chief investment officer at Catalyst Funds, told Reuters on Tuesday, adding that the hurdle for stocks "has gone up significantly."

The drivers are a mix of inflation risk and supply worries rather than a single trigger. Oil remains elevated: NBC News reported that Brent settled at $100.58 a barrel on Tuesday, with markets nervous about supply from the Middle East as a seven-month war involving Iran continues and shipping through the Strait of Hormuz remains at a fraction of prewar levels. The steepening curve, with long yields rising faster than short ones, points to investors demanding more compensation for holding long-dated debt. CoinDesk reported that billionaire Ray Dalio warned this week that the Treasury market is vulnerable to a pullback in demand from China and Japan.

Monetary policy is pulling in a slightly different direction. A soft September payrolls report has lowered the odds of a Federal Reserve rate increase this month; Reuters said CME Group's FedWatch tool showed traders pricing a near 79% chance of a hold in October, although a December hike remains largely priced in. Called It covered that shift in the reversal in yields after the jobs report and in Governor Jefferson's comments on waiting longer. The fact that long-end yields kept climbing even as near-term hike odds fell is what makes the Treasury yields highest since 2002 story notable: the market is pricing risk further out, not just the next Fed meeting.

Unusually, stocks have risen alongside yields. The S&P 500 set a record on Tuesday, and NBC noted that yields and equities have climbed in tandem in recent weeks, a pattern that typically relies on strong earnings expectations.

What's next

Some strategists think the peak is near. "Several forces suggest rates may peak within the next month," Apollo's Torsten Slok said on Tuesday, according to NBC, arguing that approaching midterm elections raise the odds of a Middle East deal that would lower oil prices. That is a view, not a forecast the market has endorsed. In the near term, watch Fed speakers this week, including New York Fed President John Williams, upcoming Treasury auctions and oil prices. A sustained close above Monday's level would extend the run of Treasury yields highest since 2002; a drop in crude could do the opposite.