A Two-Week Rollercoaster in Yields

Market Blog
September 24, 2019

As shown in the LPL Chart of the Day, the 10-year Treasury yield jumped 34 basis points (0.34%) in the week ending September 13, then gave back half that gain in a 17 basis point (0.17%) slide last week. The benchmark yield hasn’t moved at least 15 basis points (0.15%) in two consecutive weeks since November 2016.


The 10-year yield’s rapid ascent earlier this month was sparked by optimistic trade headlines and improving economic data, especially regarding inflation. On September 13, the 10-year yield jumped 12 basis points (0.12%) amid news that U.S.  retail sales topped expectations and that China would exempt some agricultural products from tariffs. Treasuries’ swift selloff also caught investors off guard, spurring more selling and even higher yields (yields go up when bond prices fall). Then gravity kicked in, and the 10-year yield slid for five consecutive days as trade headlines turned negative and global worries took over.

“The recent rally in yields was historically strong, so we expected fixed income markets to recalibrate,” said LPL Financial Chief Investment Strategist John Lynch. “Even if we see progress in trade talks, the buying pressure in Treasuries could persist as the global economy recovers from trade disruptions and other central banks eye drastic monetary policy easing.”

The combination of easier policy, solid economic fundamentals, and the widening budget deficit suggests to us that yields could move higher. Until we get trade clarity, though, we look for the 10-year yield to hover around current levels.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in this material may not develop as predicted.

All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. All performance referenced is historical and is no guarantee of future results.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

This Research material was prepared by LPL Financial, LLC.

Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC).

Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL Financial affiliate, please note LPL Financial makes no representation with respect to such entity.

  • Not Insured by FDIC/NCUA or Any Other Government Agency
  • Not Bank/Credit Union Guaranteed
  • Not Bank/Credit Union Deposits or Obligations
  • May Lose Value

For Public Use | Tracking # 1-896800