Treasury yield

In plain terms

Bond prices and yields move like a seesaw. When many investors want to buy Treasuries, prices rise and yields fall; when they sell, prices drop and yields rise. The 2-year yield mostly reflects expectations for Fed policy, while the 10-year also captures the outlook for growth, inflation and government finances.

Why it matters

The 10-year yield is the reference for mortgage rates and corporate borrowing costs, and the discount rate used to value stocks. A big jump in the 10-year tends to shake asset prices worldwide.

How it connects to markets

• A rising 10-year yield: pressure on growth-stock valuations (distant profits are worth less today), a firmer dollar, softer gold, and worries about outflows from emerging markets
• A falling 10-year yield: usually supportive for growth stocks and housing, with hopes of cheaper mortgages
• If yields fall because of recession fears, stocks can fall too, so the reason behind the move matters

Where to check

• FRED: 10-Year Treasury yield (DGS10)