The 10-year U.S. Treasury yield rose to 5.25% on the 29th, its highest level since June 2007, up 3.76 percentage points from 1.49% in September 2021. The move indicates a substantial decline in Treasury prices and reflects a shift in how investors view the debt. Christopher Waller, a U.S. Federal Reserve (Fed) governor, said the premium for safe and highly liquid U.S. Treasuries had disappeared. Analysts connect that lost premium to the convenience yield, the benefit investors accept lower returns to obtain from holding a safer asset. As perceptions of Treasury risk have increased, the government has had to offer higher yields to issue debt. Treasury rates have also begun reflecting a shrinking convenience yield and risks associated with the U.S. government’s massive fiscal deficit through the term premium, rather than rising mainly because of inflation expectations and benchmark interest rates. Major central banks are reducing Treasury holdings and increasing gold reserves, while hedge funds and other return-sensitive private investors have become more active buyers. Private investors accounted for 73% of Treasury circulation this year, compared with 50% a decade ago, and bought $14 trillion of the $15 trillion increase in outstanding Treasuries over the past decade. Forecasts cited in the report generally expect yields to remain high, with limited room for either a move to 5.5% or a significant decline.