Investing
Yield note
Why US Bond Yields Are Rising: 10-Year at 5.22% After a 24-Year High
The US 10-year Treasury yield closed at 5.22% on 13 October 2026, a week after a 5.31% close that CNBC puts as the highest since April 2002. This note sets out the levels, the drivers, the curve and the gap to Malaysian rates, from the data. It makes no forecast.
5.22%
US 10-year close, 13 Oct
5.31% on 5 Oct, highest since April 2002; 4.94% on 10 Sep
3.75% to 4.00%
Fed funds target range
raised 16 Sep, all 19 officials in favour; 20% to 25% priced for a hike on 28 Oct
3.84%
MGS 10-year, 13 Oct
138bp below the US 10-year; OPR 2.75%
Why are US bond yields rising?
Four dated things since our 11 September note: the Fed raised rates and said inflation remains elevated, its minutes said another increase is likely by year end, the ISM services prices index hit a four-year high, and Brent went from US$100 to US$106. A weak jobs report on 2 October did not pull yields down. The week since the 5 October peak took back 9bp as oil eased.
| Date | Event | Figure | Source |
|---|---|---|---|
| 16 Sep | FOMC raises the target range 25bp to 3.75% to 4.00%, first hike since 2023 | Statement: inflation remains elevated. Median projection 4.1% at end-2026, flat through 2027 | Federal Reserve, CNBC |
| 2 Oct | September payrolls | +29,000 vs 84,000 expected; unemployment 4.2%; prior two months revised down 60,000 | BLS via CNBC |
| 5 Oct | ISM services, September | PMI 54.9; prices index 74.0, highest since July 2022; 17 industries paying more | ISM |
| 5 Oct | 10-year closes at 5.31% | Highest close since April 2002; 30-year 5.665%, highest since May 2002. The 10-year traded as high as 5.36% that week | CNBC, Yahoo Finance |
| 7 Oct | Minutes of the September meeting | All 19 officials backed the hike; most participants assessed that another increase would likely be appropriate by year end | Federal Reserve minutes via The Hill |
| 12 Oct | Brent crude | US$106.65 close, from US$100.20 on 7 October | Yahoo Finance |
| 13 Oct | Oil eases, yields ease | Brent down 0.9% to US$105.69 on reports of a Russia and Ukraine energy ceasefire; 10-year down 2bp to 5.22%, 2-year flat at 4.79% | CNBC, Yahoo Finance |
| 13 Oct | Fed pricing | About 20% to 25% for a hike on 28 Oct; futures point to December as the next move | CME FedWatch via CNBC, The Hill |
“The Fed controls the short end, but it has far less control over the long end.”
US bond yields today: the record
| Date | 10-year close | Note |
|---|---|---|
| 14 Oct 2025 | 4.02% | A year ago |
| 22 Oct 2025 | 3.95% | Lowest close of the last 12 months |
| 13 Jul 2026 | 4.61% | Start of the chart above |
| 10 Sep 2026 | 4.94% | Our last note; oil back above US$100 |
| 16 Sep 2026 | 5.01% | Fed hike day |
| 30 Sep 2026 | 5.29% | Quarter end |
| 5 Oct 2026 | 5.31% | Highest close since April 2002 (CNBC) |
| 7 Oct 2026 | 5.28% | Day the minutes were released |
| 13 Oct 2026 | 5.22% | Latest completed session; bond market closed 12 Oct for Columbus Day |
US Treasury yield curve
| Tenor | 13 Oct 2026 | 10 Sep 2026 | Mid-Oct 2025 | 1-year change |
|---|---|---|---|---|
| 3-month bill | 4.06% | 3.85% | 3.85% | +20bp |
| 5-year | 5.01% | 4.73% | 3.65% | +136bp |
| 10-year | 5.22% | 4.94% | 4.02% | +120bp |
| 30-year | 5.56% | 5.36% | 4.63% | +93bp |
- The 2-year was 4.79% on 13 October (CNBC), 43bp below the 10-year. A year ago the 10-year sat 17bp above the 3-month bill; now the gap is 116bp.
- The 5-year has moved most over the year, +136bp. The Fed funds range moved +25bp in the same period.
- Yahoo Finance daily closes for the 3-month, 5-, 10- and 30-year, with the year-ago column from 13 and 14 October 2025; the 2-year is CNBC’s 13 October print.
What it means for Malaysia
| Item | Malaysia | United States | Gap |
|---|---|---|---|
| Policy rate | 2.75% (held 3 Sep, seventh hold) | 3.75% to 4.00% (raised 16 Sep) | 100 to 125bp |
| 10-year government yield | 3.84% (13 Oct) | 5.22% (13 Oct) | 138bp |
| Same gap a year ago | about 3.48% | 4.02% | about 54bp |
| Next decision | 5 Nov | 28 Oct | |
| What swaps and futures price | about 50bp of BNM hikes over 12 months (17 Sep) | 20% to 25% chance of a hike on 28 Oct |
- MGS 10-year: 3.84% on 13 October, down 34bp in a month from the 4.22% to 4.24% peak of mid-September, its highest since December 2024 (Trading Economics). The fall came after Budget 2027 on 9 October set a 3.3% deficit target for 2027 and debt at 63.7% of GDP, from 65.2% in 2025.
- Foreign flows: net sales of US$1.4 billion of Malaysian bonds in July, the most since October 2024 (The Star, 30 Jul). Japanese holdings were 1.1 trillion yen at end-2025 and the MGS premium over Japanese bonds had shrunk to about 112bp from a five-year average of 278bp (Bloomberg, 17 Sep).
- Ringgit: 4.083 per dollar on 13 October, from 4.056 on 10 September; the three-month high was 4.097 on 19 September, three days after the Fed hike.
- Deposits: the best FD on rates.my is 4.38% p.a. on a six-month promotion and the headline board starts at 4.10%. Malaysian FD rates are priced off the OPR, which has not moved since July 2025, not off US yields.
- Inflation: Malaysia 1.9% in August; headline inflation averaged 1.8% in the first seven months (BNM, 3 Sep).
Dates
- 14 October, 8.30pm MYTUS September CPI. Consensus per CNBC: 3.7% headline, from 3.4% in August; 2.5% core, from 2.4%.
- 28 OctoberFOMC decision. About 20% to 25% priced for a hike.
- 5 NovemberBank Negara’s last MPC of 2026. Swaps priced about 50bp of hikes over the coming year as of 17 September.
- 10 November, 9.30pm MYTUS October CPI, the last inflation print before the December FOMC.
Not financial advice. Yields are Yahoo Finance daily closes to 13 October 2026, the last completed US session before publication; the 2-year, the Fed pricing, the CPI consensus and the record dates are CNBC’s. MGS and the OPR are from Trading Economics and Bank Negara. Rates.my holds no CMSA licence and gives no yield forecast, target or recommendation.
Related: our 11 September note US 10-year yield at 4.9%, highest since 2023, the Budget 2027 summary, the live ringgit rates and today’s best FD rates.
Sources
- CNBC: 10-year Treasury yield falls as energy prices stabilize (13 Oct 2026)
- CNBC: Treasury yields slide as surge to multiyear highs cools (6 Oct 2026)
- The Hill: Fed officials view another rate hike as likely, meeting minutes show (7 Oct 2026)
- Federal Reserve: FOMC statement, 16 September 2026
- CNBC: Fed rate decision September 2026, rates rise to 3.75% to 4%
- CNBC: Labor market faltered in September as jobs increased by just 29,000 (2 Oct 2026)
- ISM: Services PMI at 54.9%, September 2026 report
- CNBC: September CPI report, what to expect (13 Oct 2026)
- BLS: CPI release schedule
- Trading Economics: Malaysia 10-year government bond yield
- Bloomberg via The Star: Malaysia’s battered bonds face risk of Japan fund exodus (17 Sep 2026)
- The Star: Malaysia’s bond market outflow may slow on fiscal, rate outlooks (30 Jul 2026)
- Bank Negara Malaysia: Monetary Policy Statement, 3 September 2026
- Bank Negara Malaysia: MPC meeting schedule 2026
- Yahoo Finance: ^TNX, ^TYX, ^FVX, ^IRX, MYR=X and BZ=F daily data to 13 October 2026
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