U.S. Treasury Yields Surpass 2022 Peak as Strategists Warn of Potential Rise to 6%
Miles Bennett
The U.S. 10-year Treasury yield has risen to 4.65%, surpassing its 2022 peak when inflation hit 9%. Strategist Jim Bianco warns that if the Fed keeps hesitating, long-end rates could reach 6% — squeezing equity valuations and corporate borrowing costs alike.
Inflation halved, yet yields are higher — what is going on?
In 2022 U.S. inflation hit 9% and the Fed hiked aggressively, yet the 10-year yield peaked at just 4.23%.
Today inflation has fallen roughly by half, but the 10-year yield sits at 4.65% and the 30-year at 5.15% — both above their 2022 highs.
This means → yields are no longer simply tracking inflation; the market is pricing in a different kind of risk.
What exactly is the market worried about?
Macro strategist Jim Bianco argues the divergence stems from concern that the Fed is not hawkish enough on inflation.
In plain terms = investors feel the Fed talks tough on prices but drags its feet in practice — so they demand higher yields as self-protection.
This reflects a growing trust gap between bond markets and the central bank — the wider that gap, the higher yields get pushed.
What happens if yields keep climbing?
Bianco warns that continued Fed hesitation could send the 10-year yield to 5.5% or even 6%.
This means → sustained rises in long-end rates — the interest rates on bonds of 10 years or more, which anchor mortgage and corporate-loan pricing — would compress equity valuations and raise the cost of capital.
In plain terms = borrowing gets more expensive and stocks get cheaper — both at the same time, creating a double drag on markets.
Content is for reference only, not financial advice.