Treasury Yields: A Long-Term Perspective

This article was originally written by Doug Short. From 2016-2022, it was improved upon and updated by Jill Mislinski. Starting in January 2023, AP Charts pages will be maintained by Jennifer Nash at Advisor Perspectives/VettaFi.

Let's have a look at a long-term perspective on Treasury yields as of the February 28, 2023 close. The chart below shows the 10-year constant-maturity yield since 1962 along with the Fed funds rate (FFR) and inflation. The range has been astonishing. The stagflation that set in after the 1973 Oil Embargo was finally ended after Paul Volcker raised the FFR to 20.06%.

As of February 28, 2023, the 10-year note was 340 basis points above its historic closing low of 0.52%, reached on August 4, 2020.

Now let's overlay the S&P 500 to see the historical pattern of equities versus Treasury securities. This is a nominal chart, which significantly distorted the real value of both yields and equity prices.