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US 10-Year Yield Eyes 5% as the Long End Defies the Fed

US 10-Year Yield Eyes 5% as the Long End Defies the Fed

By: 
Navnoor Bawa
Updated: Aug 3, 2026, 13:06 GMT+00:00

Key Points:

  • The US 10-year Treasury yield closed July 31 at 4.75%. My call is 5.00% by the September 15-16 FOMC or 5.10% if the August 5 refunding drops Treasury's steady auction size guidance.
  • Term premium, the compensation investors demand for holding duration supplied about half of July's selloff. The expected path of Fed policy supplied the rest.
  • The 2-year yield fell 4 basis points (bp) on the July 29 FOMC session while the 30-year rose 11 bp. 2s30s steepened 15 bp in an afternoon.
  • Gold tracked its real-yield beta to within 0.04 percentage points through the move, so it hasn't been spared.

The 10-year Treasury yield ended July at 4.75% its highest close of the quarter, two sessions after the Fed held rates for the fifth meeting in a row. The easy read that evening was a hawkish committee. The curve then spent the rest of the week moving the wrong way for that story. Buyers, in my read were charging more to hold long federal debt and I expect a 5.00% print before the September meeting.