10-Year Treasury Yields At 16-Year Highs Shake Markets: How Far Can They Climb?
Portfolio Pulse from Piero Cingari
The 10-year Treasury yield has surged above 4.75%, its highest level since August 2007, causing a ripple effect in financial markets. The US Treasury 10 Year Note ETF (UTEN) and the iShares 10-20 Year Treasury Bond ETF (TLH) have registered significant losses, while the iShares 20+ Year Treasury Bond ETF (TLT) has lost more than half of its value since March 2020. The SPDR S&P 500 ETF Trust (SPY) has also been affected, experiencing its roughest month of the year. The rise in Treasury yields is attributed to an expansion of the U.S. government’s budget deficit, the ongoing Fed quantitative tightening program, and the Federal Reserve’s restrictive stance on interest rates.
October 03, 2023 | 4:52 pm
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NEGATIVE IMPACT
The SPDR S&P 500 ETF Trust (SPY) just limped through its roughest month of the year, setting a gloomy stage for October.
The rise in Treasury yields has led to a decrease in the value of the SPY ETF, as higher yields can lead to a sell-off in equities. This trend is likely to continue if yields keep rising.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
The iShares 10-20 Year Treasury Bond ETF (TLH) is trading at its lowest since July 2007 due to the rise in Treasury yields.
The rise in Treasury yields has led to a decrease in the value of the TLH ETF, as higher yields mean lower bond prices. This trend is likely to continue if yields keep rising.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
The iShares 20+ Year Treasury Bond ETF (TLT) has lost more than half of its value since the onset of the pandemic in March 2020.
The rise in Treasury yields has led to a decrease in the value of the TLT ETF, as higher yields mean lower bond prices. This trend is likely to continue if yields keep rising.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
The US Treasury 10 Year Note ETF (UTEN) has registered five consecutive months of losses, declining by over 10% since reaching its peak in March 2023.
The rise in Treasury yields has led to a decrease in the value of the UTEN ETF, as higher yields mean lower bond prices. This trend is likely to continue if yields keep rising.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100