Every three months, the Journal asks dozens of economists where rates are going. In July they said the 10-year Treasury yield would end this year at 4.4%. This month, 71 of them said 5.1%. That's a big move for a careful crowd. The people paid to forecast rates have stopped calling 5% a blip.
Here's why it matters to you. The 10-year Treasury sets the price of money for almost everything else. Mortgages, car loans and what companies pay to borrow all follow it. The economists see 4.96% in the middle of 2027 and 4.78% at the end of 2027. In July those numbers were 4.3% and 4.26%. Allen Sinai of Decision Economics called it “a sea change.” He thinks the 10-year could get close to 6% next year. Carl Tannenbaum of Northern Trust sees about 5.2% through 2028, then 5% by the end of 2029. He points to the growing federal debt and the money the AI build-out needs.
The government's own planners see a different world. In February the Congressional Budget Office said the 10-year wouldn't top 4.3% this decade. The White House budget office sees yields sliding into the mid-3% range. Interest on the national debt already costs more than the military, the Journal notes. Every year near 5% adds to that bill.
A calm market, a big number
Markets didn't flinch through Tuesday, Oct. 13. The S&P 500 closed Friday, Oct. 9 at 7,811.54. It closed Monday at 7,807.24 and Tuesday at 7,805.45. All three sat just under the record of 7,818.93 set on Oct. 6. The 10-year closed Friday at 5.243%. The bond market was shut Monday for Columbus Day. On Tuesday it closed at 5.216%. The VIX, Wall Street's fear gauge, ended Tuesday at 15.27. That's a quiet number. The economists also raised their growth forecast for 2026 to 2.4% from 2.1%. They put recession odds at 24%. Not everyone agrees. Rajeev Dhawan of Georgia State sees a “white-collar job malaise” and expects the Fed to cut instead.
Our read
This is Fixed Income (IN02) and Time Value of Money (M3). A planning rate is a quiet assumption that touches everything. Many plans written a few years ago assumed long rates near 4%. If the forecasters are right, 5% is the normal for a while. That cuts both ways. Cash and short Treasury bills now pay real money. A 13-week bill sold Tuesday at 4.085%. The average five-year bank CD pays 1.80%, by the paper's table. That gap is where a lot of retirement cash sits and loses. The house keeps safe money in bills and floating-rate paper, SGOV in 49 books and USFR in 14. We avoid long bonds. TLT sits in 4 older books, nothing added. Stocks are held at weight. We bought nothing this week.
Here's your check this week. Open your plan and find the rate it assumes for bonds and cash. If it says 4%, it's old. Then look at your bond ladder, or the bond fund in your 401(k), and find its average maturity. Long maturities lose the most when yields rise, and the Journal's forecasters now expect yields to stay up. A mortgage at 7.4% changes the math on any move or refinance too. Do the check now, while the market is calm, and bring the numbers to your next review. It's easier to find the umbrella before the sky opens. Part 2 of this edition has the September inflation report.