In a report from Epoch Times on September 18, 2026, the yield on 10-year U.S. Treasury bonds continues to rise and is currently hovering around the key level of 5%. Analysts believe this will have an impact on interest rates for various types of loans, from mortgages to corporate loans, and the significant influence of U.S. bonds on the global bond market could trigger more chain reactions.
On September 18, the yield on 10-year U.S. Treasury bonds continued to fluctuate around the 5% mark, the highest level since 2007. The relationship between U.S. bond yields and bond prices is inversely related and often fluctuates with investors’ expectations of future interest rates.
The yield on 10-year U.S. Treasury bonds will affect interest rates for a wide range of loans, from mortgages to corporate loans. On September 18, the average rate for a 30-year fixed-rate mortgage in the United States had risen to 7.09%, up from 6.15% at the beginning of the year. Analysts have warned that if the yield remains high, the cost of consumer credit for residents and borrowing for businesses will face further pressure.
U.S. Treasury Secretary Scott Bessent has recently intervened in the bond market, with the U.S. Treasury Department expanding its bond buyback operations last week.
During a congressional hearing on September 15, Bessent attributed the surge in yields to “global issues” and stated that the expanded bond buyback was successful. However, lawmakers have raised questions about the Treasury Department’s actions and what measures should be taken if rising yields trigger chain reactions that place pressure on the economy and stock market.
According to a report in The Wall Street Journal on September 16, the future direction of bond yields will depend on the actions of the Federal Reserve, economic data, military conflicts, and even the stock market itself. The rise in bond yields is undoubtedly dragging down the popularity of the stock market.
Analysts believe that if the stock market begins to plummet significantly, many investors may rush into bonds and other safer assets, thereby pushing down bond yields.
Kish Pathak, a fixed-income research analyst at MFS Investment Management, stated that if the stock market experiences a sharp decline due to concerns about artificial intelligence (AI) security or any other reason, it could not only harm consumers but also potentially mark the beginning of a “decoupling of oil prices and yields.”
Currently, Wall Street generally holds an optimistic view of economic growth but adopts a pessimistic stance towards inflation. Ian Lyngen, Head of U.S. Rate Strategy at BMO Capital Markets, expects that the yield on 10-year U.S. Treasury bonds will maintain the 5% mark in the short term in the face of inflation and market turbulence.
Grace Peters, Global Head of Investment Strategy at JPMorgan Chase Private Bank, cautioned that if bond yields rise to the 5%—5.25% level, the stock market may face a situation of “indigestion.”
Daleep Singh, Chief Global Economist at PGIM Credit, believes that the more the Federal Reserve demonstrates credibility in fighting inflation, the more likely it is to depress bond yields in the medium term.
On September 16, the Federal Reserve announced a 25-basis-point rate hike to 3.75%—4%, and Federal Reserve Chairman Kevin Warsh made anti-inflation remarks.
On a global scale, borrowing costs have reached multi-year highs, with investors believing that various central banks may need to raise rates to combat inflation pressure. The European Central Bank raised its three key rates by 25 basis points on September 10 while warning of ongoing price pressures.
Mansoor Mohi-uddin, Chief Macro Strategist at a Singaporean bank, said, “We are witnessing a perfect storm: rising oil prices, intensifying inflation concerns, hawkish central bank stances, and ongoing worries about fiscal deficits, all contributing to the increase in global bond yields.”