US 10-year Treasury yield tops 4.90% for first time since November 2023

The US 10Y Treasury yield has moved above 4.90% for the first time since November 2023, up 95 bps since the Iran conflict began and 10 bps since the US Treasury announced it would triple long-term buybacks to $6 billion. A move to 5.00%+ by next week is now plausible.

Key impacts:
- Borrowing costs: Rising for the US government and consumers, tightening financial conditions.
- Housing market: Activity slowing sharply. Deal cancellations have reached the highest rate since 2023, signaling a freeze in transactions.
- Market dynamics: The bond market is pressuring the Treasury. Higher yields increase debt service costs and crowd out risk appetite.
- Macro outlook: Elevated rates into Q4 raise recession risk, liquidity stress, and volatility across assets.

Implications for crypto and risk assets:
- Higher real yields historically correlate with weaker performance in long-duration and risk assets, including tech equities and cryptocurrencies.
- Tighter liquidity and rising dollar strength are probable headwinds for crypto prices and funding markets.
- Increased volatility: Macro-driven swings likely increase as markets reassess terminal rate expectations and fiscal sustainability.