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The 10-year Treasury yield collapsed to a historic low of 0.89% in 2020 as the Fed slashed rates during the COVID-19 shock, then surged as inflation spiked post-pandemic. By 2026 it remains elevated at 4.6% — driven by persistent inflation and record Treasury issuance to finance $2T+ annual deficits.
The gap between the 10-year yield and PCE inflation reveals the real rate environment. Post-2022, both surged; the key question is whether PCE returns to the 2% target before yields follow.