Treasury yields top 5%, the highest level since 2002

Yields on 10-year and 30-year U.S. Treasury bonds have climbed above 5%, their highest levels since 2002, following a Federal Reserve increase in short-term interest rates in September 2026, according to a Motley Fool analysis published by Yahoo Finance on October 15, 2026.

Higher yields raise borrowing costs across mortgages, car loans and business lending, making it more expensive for companies to refinance debt or fund expansion, and they give investors an income alternative to equities. Stocks have so far absorbed the move: the S&P 500 is up 14% in 2026.

Research from Fidelity published in September 2026 found rising rates are not automatically negative for equities, citing persistent above-average inflation, which has historically favored companies with pricing power, and heavy corporate bond issuance by large technology companies funding artificial intelligence data centers.

Measured against the period since 1980, 10-year and 30-year yields remain below their 46-year averages. The Vanguard S&P 500 ETF has returned an annualized 14.94% over the past 16 years and about 13.8% over the past five, gains recorded largely during the low-rate stretch from 2009 to 2022.

This story was first reported by Yahoo Finance.