The 10-year US Treasury yield briefly exceeded 5% on September 15-16, reaching roughly 5.04%, a level not seen in the bond market since July 2007. It later settled around 4.95%, while the 30-year bond traded above 5.28% in mid-September. The 10-year yield has risen approximately 0.8 percentage points year to date. The Federal Reserve raised the federal funds rate by 25 basis points to a target range of 3.75% to 4.00% at its September 16-17 FOMC meeting, its first rate hike since 2023. Fed Chairman Kevin Warsh said inflation was “too high… for too long,” while the Fed’s dot plot indicates expectations for further tightening. Persistent inflation, oil prices above $100 per barrel amid geopolitical supply constraints, and heavy US government borrowing are driving the selloff in bonds. Profit-taking and a slight decline in oil prices have provided limited relief, but analysts caution that yields could retest or exceed recent highs without meaningful progress on inflation or a reduction in Treasury issuance. Higher yields are already lifting mortgage and corporate borrowing costs, weakening the relative appeal of equities and putting particular pressure on growth stocks. Bitcoin and the broader digital asset market face higher opportunity costs because real yields make non-yielding assets less attractive. DeFi (decentralized finance) protocols and crypto-native lenders must also offer returns that compensate investors for smart contract risk, liquidity risk and regulatory uncertainty in addition to the roughly 5% available from US government bonds.