Forced selling triggers feedback loop as US 10-year yields hit 2007 highs
US government bonds experienced their worst monthly performance in four years in September, with 10-year Treasury yields rising by more than 50 basis points to reach 5.3%. This surge marks the highest level since 2007 and approaches rates last seen in 2002. The sell-off in the $32 trillion market has evolved into a self-reinforcing cycle where rising yields force institutional investors to divest long-term debt, further pushing borrowing costs higher. While initial concerns stemmed from inflation and public debt, technical factors now dominate, with no significant buyers stepping in to stabilize prices.
