Treasury Yields: A Long-Term Perspective
This article takes a look at a long-term perspective on Treasury yields as of the August 31, 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 August 31, 2023, the 10-year note was 373 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.