The 10-Year Yield Is 2 Basis Points From Its 2007 Peak. One More Push Takes It Back to 2002
Treasury yields are closing in on levels not seen since the early 2000s, and four converging forces suggest the pressure on mortgages, stock multiples, and your portfolio is far from over.
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The 10-year Treasury yield closed at 5.24% on September 28, 2026, up from 5.17% on September 25. That puts it just below the 5.26% closing yield recorded on June 12, 2007.
There was an intraday high of 5.274% on September 28, the highest since June 2007. On a closing basis, the yield is now only two basis points below the June 2007 peak. Before that, the 10-year had closed at 5.27% on May 17, 2002.
The 30-year closed at 5.56% and the 20-year at 5.60%, so the pressure runs across the whole long end of the curve, according to ING.
Four Forces Pushing Yields to a Two-Decade High
Yahoo Finance’s Jake Conley tied the move to expected Fed hikes plus “an energy crisis kicked off by the war in Iran, ballooning US government debt and budget deficits, and a historic investment cycle driven by the AI build-out.”
The Fed raised rates on September 16, 2026, its first rise since 2023, lifting the upper bound to 4.00%. Market-implied odds of another October rise sit at roughly 65% to 70%.
Oil supports the move, because WTI crude hit $107.02 on September 15 and still sat at $96.41 on September 22.
Deficits and AI spending compete for the same pool of savings, and the yield is the price lenders charge when both arrive at once. That dynamic is showing up in Treasury auctions.
The Federal Reserve’s Lisa Cook said on September 28, 2026, “I expect to see continued pressure on inflation from the AI build-out … and from the pass-through of higher oil prices.”
A recent auction drew its weakest bid-to-cover ratio in a year, meaning buyers need more yield to take in supply.
Where Higher Yields Hit What You Own
Freddie Mac’s 30-year mortgage average reached 7.03% as of September 24, 2026, up from 6.30% a year earlier. Existing-home sales fell to an annualized 3.98 million in August, the lowest level in a year, and starts dropped to 1.27 million, reducing homebuilder demand.
The S&P 500’s forward multiple fell to 19, from 22, partly because higher interest rates shrink what future earnings are worth now, hurting growth stocks most.
The 10-year to 2-year spread was 0.32% on September 28, down from 0.74% in February. Inversions have preceded past recessions, though they are not a precise timing tool.
J.P. Morgan and ING Split Between 5% and 6%
Karen Ward of J.P. Morgan Asset Management expects the 10-year to rise only slightly above 5%. ING sees 6%, which would push mortgages and stock multiples further down.
Yahoo Finance lists the PCE inflation reading on September 30, 2026, and the jobs report on October 2, 2026, as the next tests.
Optimists argue that homebuilders, utilities, and REITs already price in pain, so if Ward is right, they rebound first. Pessimists have the stronger case, because oil, deficits and AI spending will not reverse on one data point while the Fed is tightening.
The 10-year likely closes above both the 2007 and 2002 marks, keeping pressure on rate-sensitive stocks for now.
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Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
