Yield on 10-year Treasury note

Investor appetite for treasury bonds increased during the past decade, leading to higher prices, and thus, lower yields. These declines were particularly pronounced right before the decade in 2008 and 2009, as the high level of uncertainty in stock markets and real estate drove investors away from those asset classes and toward the safety of government debt. To stabilize the panicked asset markets, particularly for certain types of asset-backed securities, the Federal Reserve (Fed) launched its first round of quantitative easing in 2008. This involved the purchase of an estimated $2.0 trillion in Treasury and mortgage debt, bidding up the price of these bonds and thus depressing yields. This occurs mainly because there is a unique clientele for long-term safe nominal assets, and Fed purchases reduce the supply of such assets and hence increase the equilibrium safety-premium. The reasoning behind quantitative easing is that with lower interest rates, individuals will shift their funds toward alternate assets, including homes and stocks. Meanwhile, consumers will expect heightened inflation in the near future and will thus resume purchases before their spending power weakens. As a result, 10-year bond yields shriveled from 4.63% in 2007 to just 1.80% in 2012.

Yields were projected to rebound considerably in 2010 and 2011 as the economy regained traction and money shifted back to riskier assets. However, the recovery was slower in those years than initial projections, and unemployment persisted along with paltry wage growth over those two years. With anemic growth in consumer spending and the dual threats of deflation and a double-dip recession, the Fed engaged in accommodative monetary policy to prime the United States' economic pump. This included a second round of quantitative easing (QE2) through the first half of 2011 followed by an announcement in January 2012 to keep the federal funds target rate exceptionally low at least through late 2014. Following this announcement, yields declined further. When the Federal Open Market Committee (FOMC) met in late June 2012, it extended its "Operation Twist." This involved the Fed selling $400.0 billion of short-term treasuries and buying an equal amount of long-term treasuries to reduce long-term interest rates. In addition, the FOMC announced a third round of quantitative easing (QE3) over that year.

In 2013 and 2014, as the economy recovered, job growth began to bounce back and equity markets grew. As confidence in the markets returned to investors, treasury markets started to experience sells offs. The growth in the economy pushed the Fed to raise rates for the first time since 2008 in late 2015, while this rate hike was positive for yields, the significant decline of world crude oil prices, negatively affected company earnings and drove many investors to again move their funds into the less-risky US treasury market. Yields continued to decline over 2016 as low commodity prices and political uncertainty continued to decrease investors' risk appetites. However, toward the end of 2016, as political uncertainty eroded with the outcome of the presidential election, the treasury market experienced a significant sell off, pushing up yields at the end of the year, and keeping the market from falling even further. The Fed raised rates four times over 2018, due continued economic growth, anticipated policy initiatives, inflationary pressures. In 2019, interest rates were cut three times, in an effort to protect the US economy from global trade tensions and persistently low inflation. However, the outlook by investors remained gloomy amid continued uncertainty over trade tensions. Then, in March 2020, as closures in the broad US and global economy due to the COVID-19 (coronavirus) pandemic were implemented, equity markets fell drastically. Usually, investors would move into safer assets such as US Treasury's as they are considered less volatile. However, the opposite occurred, with theories of why ranging from highly leveraged hedge funds liquidating their holdings to meet margin calls to concerns from bond traders that US government fiscal deficits may become unsustainable. As a result, an extensive bond purchase program to support financial markets from the Fed saw yields drop substantially. However, in early 2021, despite the bond purchase program, a faster-than-expected economic recovery in the first half of the year led to increased inflation expectations from investors.

In response to rampant inflation, the FOMC instituted an aggressive monetary tightening stance. This included rate hikes that have occurred in every meeting with the FOMC in 2022. In line with their monetary tightening, the Fed began the sale of government bonds. As a direct result, investors turned to treasury bills for a more stable yield. Overall, the yield of the 10-year Treasury note increased 104.6% in 2022 and 34.1% in 2023. Despite rate cuts beginning in Q3 of 2024, growth in the yield continued during the year. Despite the Fed having continued to reduce rates, the yield on the 10-year Treasury note has increased during 2025.