The yield is analogous to the current interest rate demanded by the market to hold this debt for 10 years. The yield on the 10-year U.S Treasury notes briefly traded near their highest levels since March as investors pondered the economic outlook and debt ceiling negotiations dragged on. The Fed has been ratcheting up interest rates since March 2023 as it aims to ease inflation and cool down the economy. The U.S. benchmark bond yield is expected to trade at 3.4% or higher through at least the end of 2025 as the Federal Reserve averts an economic contraction in its fight against inflation. Concern has been raised that this policy, if not eased, could put certain sectors into the market into recession.

The Federal Reserve raises rates to rein in spending when the economy is growing and lowers them to encourage spending when it is contracting. Commercial banks lend money at similar interest rates, which can drive demand for real estate and thereby shore up the construction industry. Overall, the yield of the 10-year Treasury note is expected to increase over the years to 2023 due to long-term Treasury yields following increases in interest rates. It is important to note that as more investors turn to bonds, the yield will drop.