Money & Finance › Bonds, rates & Treasuries › US Treasury securities
The 10-year Treasury yield
· Concept
Fact, law or dataA rule, statute, definition or measured number.
The 10-year Treasury yield is the market interest rate on US government debt due in 10 years, and the economy's key long-term benchmark.
See it on the Money & Finance map →How it works
It is set by trading, not by the Fed. Investors demand a yield covering expected short-term rates over the next 10 years, expected inflation and a term premium for risk. It peaked near 15.8% in September 1981, hit a record low near 0.5% in August 2020, neared 5% in October 2023 and ranged between about 4% and 4.8% in 2025. Individuals can buy 10-year notes at TreasuryDirect auctions or through a brokerage.
Why it matters
Thirty-year mortgages, fixed-rate commercial loans and cap rates price off it, and stock valuations use it as the risk-free rate.
Facts, rules and data
The Treasury publishes daily yields; FRED's DGS10 series has daily data back to 1962; auction results are posted on TreasuryDirect.
Debates and risks
Why it rose about a point after the Fed began cutting in September 2024 is debated: deficits, inflation fears or a rising term premium.
Connections (6)
▸Quantitative easing (QE): buying bonds to push down rates pushes down The 10-year Treasury yieldMainstream view
The connection
The Fed buys long-term Treasuries and mortgage bonds with newly created reserves. Heavy buying lifts bond prices and lowers yields, takes long-term rate risk out of private hands so investors accept a smaller term premium, and signals that short rates will stay low for a long time.
When and why
Most vividly on March 18, 2009, when the Fed announced Treasury purchases and the 10-year yield fell about half a point in a day; later rounds ran 2010–14 and 2020–22.
How solid is the link?
Fed economists Gagnon, Raskin, Remache and Sack (2011) estimated the first round cut the 10-year term premium by 0.3 to 1 point; other event studies broadly agree.
Debates and risks
Later rounds seemed to matter less, and yields sometimes rose during buying as growth hopes improved. How much reversing QE (QT) raised yields is also debated.
▸Mortgages and the 30-year fixed-rate loan track The 10-year Treasury yieldFact, law or data
The connection
Though written for 30 years, most mortgages are repaid or refinanced within about 10, so lenders and mortgage-bond investors price them off the 10-year Treasury plus a spread for prepayment, servicing and credit risk. The 30-year rate usually runs 1.5 to 2 points above the 10-year. Fixed-rate commercial loans are quoted the same way, off the matching Treasury.
When and why
Tracked weekly by Freddie Mac since 1971; in October 2023 the 10-year neared 5% and the 30-year mortgage hit 7.79%.
How we know
Plot Freddie Mac's mortgage rate against the 10-year yield on FRED and the two move nearly in step for decades.
Debates and risks
The spread widened to about 3 points in 2023 as the Fed stopped buying mortgage bonds and rates swung; how far it will narrow is uncertain.
▸The 10-year Treasury yield is set by trading in Treasury notes and bonds (2 to 30 years)Fact, law or data
The connection
The 10-year yield is simply the market yield on the most recently issued 10-year Treasury note, set moment to moment by buying and selling among dealers, funds, banks and foreign investors. The Fed does not set it. Weak demand at a 10-year auction, or worries about deficits or inflation, can push it up quickly.
When and why
In the Treasury cash and futures markets; new 10-year notes are auctioned in February, May, August and November, with reopenings in other months.
How we know
Treasury publishes a daily official yield curve; dealer quotes on the current 10-year note are public in real time.
Debates and risks
How much of the 10-year yield reflects expected Fed rates versus a 'term premium' for risk; model estimates vary widely.
▸The 10-year Treasury yield anchors Cap rates: how real estate is pricedMainstream view
The connection
The 10-year Treasury is the safe alternative to owning property, and commercial loans are priced off similar Treasury yields. Buyers want a cap rate equal to that yield plus a risk premium, minus expected NOI growth. When the 10-year rose from about 1.5% in 2021 to near 5% in October 2023, cap rates rose and values fell.
When and why
Most visible in US commercial real estate during 2022–24, and earlier in the high-rate 1980s; office properties were hit hardest.
How solid is the link?
Research from CBRE, Green Street and others shows cap rates following Treasury yields over time, with lags and wide variation in the spread.
Debates and risks
The spread over the 10-year has swung from below zero in the high-inflation early 1980s to about 5 percentage points; how much rent growth can offset rate moves is argued.
▸The 10-year Treasury yield anchors the discount rate behind Earnings, market cap and the P/E ratioMainstream view
The connection
A stock is worth its future profits discounted back to today. The discount rate starts with the risk-free 10-year yield, plus an extra 'equity risk premium'. When the 10-year rises, future profits are worth less now, so investors pay lower P/Es, especially for growth stocks whose profits lie far ahead. Mainstream view, though the link is loose.
When and why
Clear in 2022, when the 10-year rose from about 1.5% to near 4% and the S&P 500's forward P/E fell from about 21 to near 15.
How solid is the link?
Standard discounted cash flow theory, which most practitioners accept, plus episodes like 2022; over decades the correlation between yields and P/Es is weaker.
Debates and risks
The 'Fed model' comparing earnings yields directly with bond yields is disputed, and P/Es stayed high in 2024–25 despite 10-year yields above 4%.
▸Fixed vs. floating rates on property loans set fixed rates as a spread over The 10-year Treasury yieldFact, law or data
The connection
Lenders price a 10-year fixed loan as the 10-year Treasury yield plus a credit spread, often 1.5–3 points. When that yield rose from about 1.5% in 2021 to nearly 5% in October 2023, typical 10-year fixed property loans jumped from about 3–4% to 6.5–7.5%.
When and why
Life companies, CMBS conduits and banks; 5- and 7-year loans use the matching Treasury or swap rate instead.
How we know
The Fed's H.15 Treasury yield data alongside lender rate sheets and MBA and Trepp data on CMBS coupons.
Debates and risks
Spreads and Treasury yields can move in opposite directions in stress, so the all-in rate is harder to forecast than either piece.