The US 10-year Treasury yield rose about 85 basis points in the third quarter through Sept. 30, its biggest quarterly increase since 2016, as selling spread across maturities. The two-year yield gained about 75 basis points, the most since the second quarter of 2023, while the 30-year climbed about 70 basis points, its biggest increase in two years.

A brief decline in yields following cooler PCE inflation data on Wednesday failed to hold. The 30-year yield subsequently reached 5.641% and the 20-year hit 5.685%, both their highest levels since 2002. The 10-year had reached 5.28% on Tuesday, its highest since 2007.

The bond market was pricing in four more Fed increases of 25 basis points each by June 2027, compared with expectations nine months earlier for at least 100 basis points of cuts by then. Higher borrowing costs are already reaching homebuyers: the average US 30-year fixed mortgage rate rose to 7.45% on Sept. 24.