The 10-year Treasury yield rose to 4.75 percent in Monday’s session, its highest level since January 15, 2025, after Federal Reserve Chair Kevin Warsh warned about sticky inflation at the Jackson Hole symposium. Futures markets now put the probability of a September rate increase at 57.5 percent, according to the CME FedWatch tool.
The setup
Bonds and stocks sold off together on Monday as Middle East escalation pushed oil prices sharply higher. The yield on the 30-year Treasury bond rose three basis points to 5.243 percent, extending a climb that has pressured equity valuations and mortgage rates alike.
Warsh told the Jackson Hole audience that inflation remains sticky, and traders heard a chair preparing to tighten rather than ease. The Fed’s current target range stands at 3.50 to 3.75 percent.
Key numbers from Monday’s session
| Indicator | Level | Change |
|---|---|---|
| 10-year Treasury yield | 4.75% | +2 basis points |
| 30-year Treasury yield | 5.243% | +3 basis points |
| Fed funds target range | 3.50% to 3.75% | Held steady |
| Odds of a September increase | 57.5% | CME FedWatch |
| WTI crude oil | $85.76 | +2.83% |
| S&P 500 | 7,686.14 | -0.3% |
| Dow Jones Industrial Average | 53,185.90 | -0.7% |
Income per $100,000 invested
A $100,000 purchase of the 10-year note at a 4.75 percent yield produces $4,750 in annual interest. The same amount in the 30-year bond at 5.243 percent produces about $5,243 per year, before taxes and inflation.
| Treasury security | Yield | Annual income per $100,000 |
|---|---|---|
| 10-year note | 4.75% | $4,750 |
| 30-year bond | 5.243% | $5,243 |
Those figures assume the bond is held to maturity and the purchase yield is locked in. Selling early exposes the position to price swings if yields keep climbing.
What the stock selloff means for income investors
Equities ended August near record highs, so a single red session counts as noise rather than a trend. The S&P 500 gained 2.6 percent in August, and the Dow rose more than 1 percent, its fifth straight monthly advance.
Both indexes set fresh records early last month. Oil at $85.76 per barrel is the variable to watch, since energy costs feed directly into the inflation readings that Warsh flagged.
What to watch
- The September FOMC meeting, where futures price a 57.5 percent chance of a 25-basis-point increase to 3.75 to 4.00 percent
- Oil prices, with WTI up 2.83 percent to $85.76 and Brent at $90.49
- The volatility index, which rose 3.4 percent to 14.92 and remains low by historical standards
Common mistakes bond buyers make at high yields
- Reaching for the 30-year bond for the extra yield without planning to hold it to maturity
- Building a ladder that matures all at once, forcing a single reinvestment decision at one rate
- Ignoring inflation, which takes a fixed 4.75 percent coupon down to a much thinner real return
A retiree with $400,000 in a bond ladder earning a blended 4.5 percent collects about $18,000 per year in interest. If the September FOMC meeting lifts short rates, new rungs on the ladder can be bought at better yields, raising that income without touching principal.
Bottom line
Yields at their highest levels since early 2025 give conservative investors the best bond income in more than a year and a half. Retirees building ladders can stagger maturities so the September decision never forces an all-or-nothing call.
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