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The 30-Year Treasury Just Hit 5.63%, a 24-Year High. What It Means for Mortgages, Savers and Your Bond Funds
- The 30-year Treasury yield rose to about 5.63% this week, its highest level since June 2002.
- The 10-year Treasury yield touched about 5.33% to 5.34% on Thursday, October 1, a level last seen in 2002, before easing after Friday's weak jobs report.
- The Fed's preferred inflation gauge, the PCE price index, was 3.4% in August. Core PCE was 3.0%. The Fed's target is 2%.
- The ISM manufacturing prices index jumped to 77.9 in September, a sign that companies are paying more for materials.
- The Fed's policy rate is 3.75% to 4.00%. The next decision is October 28.
A number we haven't seen since 2002
The US government borrows money by selling bonds. The interest rate it pays is called the yield. This week, the yield on the 30-year Treasury bond reached about 5.63%, the highest since June 2002.
The more closely watched 10-year yield touched roughly 5.33% on Thursday, also a level last seen in 2002. It eased on Friday after a weak jobs report made another Fed hike look less likely.
Why yields keep climbing
Think of a bond yield as the price investors demand to lend to the government for a long time. They're asking for more because:
- Inflation is sticky. The PCE price index rose 3.4% over the past year. Oil has been above $100 a barrel for weeks because of the Strait of Hormuz crisis.
- Factories are paying more. The ISM manufacturing prices index jumped to 77.9 in September, up almost 7 points in a month.
- The Fed is hiking. It raised its rate to 3.75%-4.00% on September 16.
- There's a lot of debt to sell. The Treasury is borrowing heavily, and one strategist at Jefferies described a "buyers' strike" in long-term bonds this week.
Who wins and who loses
| If you... | High yields are... | Why |
|---|---|---|
| Have cash to invest | Good | You can lock in 5%+ from the US government |
| Are retired and need income | Good | New bonds pay more than they have in two decades |
| Already own long-term bond funds | Painful | Older, lower-paying bonds fall in price |
| Want a mortgage | Bad | 30-year mortgage rates are around 7% |
| Own growth stocks | A headwind | Future profits are worth less when safe yields are high |
The simple rule about bonds
When yields go up, bond prices go down. The longer the bond, the bigger the swing.
A rough guide: a long-term Treasury fund with a duration of 15 years loses about 15% of its price if yields rise by one percentage point. A short-term fund with a duration of 2 years loses about 2%. That's why long bond funds have been hit so hard this year, and why short-term bills have barely moved.
What you can do
Park cash in short-term Treasuries. Bills that mature in a few weeks or months pay close to the Fed's rate with almost no price risk. Our step-by-step guide shows how to buy Treasury bills.
Build a ladder. Buy bonds that mature in different years, so you're never forced to guess where rates go. See how to build a bond ladder.
Don't panic-sell a bond fund. If you hold it longer than its duration, the higher interest it now earns tends to make up for the price drop.
House hunting? Budget for today's rate. If rates fall later, refinancing is a bonus, not a plan.
Canadian readers: Canadian bond yields and fixed mortgage rates tend to follow US yields. See how bond yields set Canadian mortgage rates.
What could bring yields down
A slowing job market, lower oil prices or a deal to reopen the Strait of Hormuz would all help. What could push them higher: hot inflation data in mid-October, or a Fed hike on October 28. Nobody knows which comes first, which is why spreading your bond money across different maturities makes sense.
Frequently asked questions
What is the 30-year Treasury yield right now?
The 30-year Treasury yield climbed to about 5.63% in the week ended October 2, 2026, its highest since June 2002. Yields move every day, so check the Federal Reserve's H.15 release or Treasury.gov for the latest figure.
Why are Treasury yields rising?
Four things: inflation is above 3% and oil is over $100 a barrel; the Fed has been raising rates; the US government is borrowing heavily, so there are a lot of bonds to sell; and some large buyers have stepped back from long-term bonds. When there are more sellers than buyers, prices fall and yields rise.
Do high Treasury yields mean higher mortgage rates?
Yes, usually. Fixed mortgage rates tend to sit about 1.5 to 2 percentage points above the 10-year Treasury yield. With the 10-year above 5%, 30-year mortgage rates have been around 7%.
Why is my bond fund down if yields are up?
Bond prices move in the opposite direction to yields. When new bonds pay more, older bonds that pay less become less valuable, so funds that hold them drop in price. Long-term bond funds fall the most. The upside is that the fund now earns higher interest going forward.
Should I buy long-term bonds now?
It depends on your time frame. A 5.6% yield guaranteed by the US government for 30 years is attractive for retirement income. But if yields keep rising, the price of a long bond can fall a lot. Many investors split the difference with short-term bills, a bond ladder, or an intermediate-term bond fund.
Primary sources
Data & disclaimer: This article is for educational purposes only and is not financial or investment advice. Figures reflect data available as of Oct 3, 2026, and conditions change — always confirm current pricing, rates and rules with the provider before you act. Written by Elizabeta Dimoska. See our editorial standards and disclosure.
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