09/19/2026
Dear all, the 10 year treasury yield has hit 5% at some point last week, which spook the market quite a lot recently. The increase in 10 year treasury yield is due to the higher inflation which is sitting at 3.4%, way above the Fed target of 2%. Also, the Fed has raise rate for the first time in 3 years in FOMC meeting.
But if you look back to history, you will notice that 5% is actually normal for 10 year treasury yield. In fact, it is the mean value. It’s just that market is freak out as it is the highest value in recent months. This high yield may affects some of the companies with high debt as they are now has to pay slightly more, which will reduce their profit margin.
On the other hand, company with zero to little debt will not be affected and will continue to spur their dominance among its sector.
Also, September is usually one of the most bearish month of the year. So, expect more volatility than usual in the market.
When market presents you an opportunity, do not turn it back. Grab it when everyone hate or threw them away. At least this is what I will be doing.
Image source – RBC Wealth Management, Bloomberg; monthly data through 7/31/25
