10-Year Treasury Yield Hits 5.3%, Highest Since 2002

When the 10-year Treasury yield crosses 5.3% for the first time since 2002, the bond market is not begging the Federal Reserve for a favor. It is handing the Fed a bill. The yield touched roughly 5.307% intraday on October 7, a level last seen more than two decades ago, while the par curve closed October 6 with the 2-year at 4.79%, the 10-year at 5.27% and the 30-year at 5.64%, a positively sloped path of plus 48 basis points (bp) from the 2-year to the 10-year ( CNBC US10Y , U.S. Treasury par yield curve ). This is a bear-steepening curve, the shape markets get when long-duration holders demand more compensation for sticky inflation and heavy supply rather than when investors price a recess…