5-Year Treasury Yield Hits 4.99%, Highest Since 2007

The U.S. Treasury's official daily par yield curve put the five-year note at 4.99% on September 23, up from 4.83% the session before — a 16 basis point jump in a single day and the highest reading on that series since 2007. Intraday, the move went further: Investing.com reported that the five-year climbed above 5% to 5.03%, a threshold the maturity had not crossed in nearly 20 years.

Two things hit the bond market at once on Wednesday. S&P Global's preliminary September survey showed U.S. manufacturing and services activity beating median forecasts, and a scheduled five-year note auction produced the highest auction yield since 2006, a sign of thin demand, according to Investing.com. Both landed a week after Federal Reserve officials unanimously approved the first rate increase since 2023, lifting the federal funds target to a range of 3.75% to 4%. Chair Kevin Warsh said the move removed a "dose of accommodation," Investing.com reported.

How unusual is 4.99%? On the Treasury's own daily series, the five-year yield peaked at 4.95% in 2023, 4.72% in 2024 and 4.61% in 2025. The last calendar year it ran above Wednesday's level was 2007, when it topped out at 5.18%. Investing.com, working from market quotes rather than the Treasury series, put the previous cycle peak slightly higher, at 4.99% in 2023. The rest of the curve moved with the five-year: Treasury data show the 10-year at 5.11% and the 30-year at 5.40% on September 23.

The five-year sits on the stretch of the curve that most directly prices the medium-term path of Fed policy, and it feeds into auto loan rates, corporate refinancing costs and the pricing of mortgage-backed securities. Fortune reported on September 22 that the 10-year yield had reached 5% for the first time since 2007, with U.S. consumer price inflation running at 3.4% in August — well above the Fed's 2% target — and oil trading above $100 a barrel. "We're certainly in a stagflationary period," investor Ray Dalio told Fortune, though the magazine noted that conditions remain far milder than the 1970s, when inflation peaked near 14.8% in March 1980.

Whether the five-year holds near 5% is the open question. Fortune noted that the 10-year crossed 5% intraday in October 2023 and then fell back as investors returned. The Treasury publishes an updated curve each afternoon, and the Fed's next policy meeting will show how much further officials intend to go.

This article is for information only and is not investment advice.