US Treasury Yield: For the first time since 2007, 10-year US Treasury yield crosses 5%, becoming a safe haven in times of economic uncertainty.

US Treasury Yield: For the first time since 2007, 10-year US Treasury yield crosses 5%, becoming a safe haven in times of economic uncertainty.

US Treasury Yield: The 10-year US Treasury note yield has crossed 5 percent for the first time on October 23, 2023. This is the first time since July 2007, i.e. in the last 16 years, that the US treasury note yield has crossed 5 percent. When economic uncertainty prevails, the rise in 10-year treasury note yield is pointing towards safe investment. 

The rise in US treasury note yields comes after Federal Reserve Chairman Jerome Powell’s statement last week. Jerome Powell indicated last week that the Federal Reserve may keep interest rates stable in its November meeting, although the option of increasing interest rates remains open due to fears of a rise in inflation. He said that due to the ongoing strength of the American economy and tight labor market, the tightening of monetary policy may have to be continued further, meaning the Federal Reserve may increase interest rates further.  

However, it is also believed that the government can increase the sale of bonds to compensate for the increasing deficit. On Monday, the 10-year US Treasury note yield rose by 8 basis points to reach 5.004 percent. US Treasury note yields have increased by 160 basis points since May 2023. 

Actually governments and corporate world raise money through bonds. An interest is paid on the bond which is stable. These bonds are also traded in the markets. Due to the rise in US treasury note yields, the US government recently put on hold its plan to raise money from the market by issuing bonds.  

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Due to the rise in US treasury note yields, the Indian stock market has seen a big decline due to selling by foreign investors. BSE Sensex fell by 825 points and Nifty by 260 points. Whereas a huge decline of 1100 points has been seen in the mid cap index and 500 points in the small cap index. 

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