The bond market will be closed on Monday for Columbus Day, but the stock market will operate normally A short but important week is ahead for the U.S. bond market, which will be closed on Monday, Oct. 12, for Columbus Day. Big banks will kick off quarterly earnings on Tuesday, even though the stock market will operate with normal hours on Monday. The consumer-price index for September comes out midweek and an important survey for the Treasury market is due at noon Eastern time on Friday.
A key question facing the $32 trillion Treasury market is whether additional heavy selling could suddenly spark an unwinding that pushes the yield on the benchmark 10-year Treasury note to 6%. Yields have kept climbing despite Treasury Secretary Scott Bessent’s surprise announcement in August of a series of increased buybacks of long-dated Treasurys through early November, which was aimed at calming the market. Don’t Short Yourself offers weekly money tips to help you earn it, stack it and grow it.
I would like to receive updates and special offers from Dow Jones and affiliates. I can unsubscribe at any time. **Read:**The Treasury’s bond-market intervention isn’t working. On particularly volatile days, strategists and bond managers have expressed concerns about the risk of long-dated Treasury yields becoming unhinged.
Traders instead note the market’s relative smooth, if jittery, functioning, despite the 10-year note closing September with its biggest quarterly jump since 1994. To start October, the S&P 500 and Nasdaq Composite hit fresh record highs, even as the 10-year yield climbed above 5.25% to its highest level since 2002. After 5% didn’t stop the indexes in their tracks, as some thought it might, the focus has turned to the dangers of a possible 6% 10-year Treasury yield.
Yields were fairly steady at roughly 5.25% on the 10-year and 5.6% on the 30-year on Friday. Those yields tend to attract sovereign-wealth funds, central banks, pension funds and other types of investors looking to match assets with their liabilities, Reid said. Still, a 6% 10-year yield also sounds “reasonable” if the prices for oil and related fuels stay high, the strong artificial-intelligence spending cycle continues and U.S. economic growth remains constructive, Reid said.
Pimco’s Dan Ivascyn this week told the Financial Times that the 10-year Treasury yield could hit 6% if highly leveraged investors have to suddenly unwind losing bets after weeks of heavy selling. Harley Bassman, a bond-market veteran and creator of the closely watched MOVE Index, which tracks Treasury-market volatility, said in a call Friday that he isn’t forecasting the 10-year yield. But he remains in the “higher for longer” rate camp, given a U.S. budget deficit at $2 trillion and the capital being spent by the “hyperscalers” to build data centers.
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