Market Extra: How Treasury market upheaval is rippling through global markets in 4 charts

by | Oct 3, 2023 | Stock Market

Soaring U.S. government bond yields sent shock waves across global markets in September. Now, yields have started October by pushing even higher, threatening to upend markets and the economy. Signs of stress in the Treasury market abound. As prices across the bond-market have slumped, some long-dated Treasury securities have been trading below 50 cents on the dollar. Moreover, a popular exchange-traded fund tracking U.S. government debt that matures in 20 years or longer cemented its lowest close on Monday since 2007.

Bond yields move inversely to prices, so rising yields means prices are falling. The rise in yields to their highest levels since before the 2008 financial crisis has stirred up worries that more banks might fail, like Silicon Valley Bank and Signature Bank did back in March. The first trading session of October got off to an ominous start, with the yield on the 10-year Treasury note
marching 11 basis points higher to 4.682%, the highest level since Oct. 12, 2007, according to Dow Jones Market Data. That has Wall Street strategists, including Victor Cossel, a senior macro strategist at Seaport Research Partners, warning that bond-market pain could continue until something changes — or something blows up. The Federal Reserve also could change the narrative by signaling it’s rethinking its “higher for longer” forecast for short-term rates unvei …

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