10-Year U.S. Treasury Yield Surpasses 5%, Exceeding S&P 500 Earnings Yield

On September 29, the yield on the 10-year U.S. Treasury bond surpassed 5%, exceeding the earnings yield of the S&P 500 index measured by the inverse of its price-to-earnings ratio, marking the highest relative attractiveness of bonds over stocks in about 25 years. This means that the returns from holding U.S. Treasury bonds have now surpassed the earnings yield of stocks. Yale economist Robert Shiller's cyclically adjusted excess CAPE yield model indicates that the S&P 500 index may only outperform bonds by about 1% annually over the next decade. However, the predictive accuracy of this model has declined in recent years, with actual stock market performance significantly exceeding its prior expectations. The current high yield reflects the resilience of the U.S. economy but also places higher demands on stock valuations and corporate earnings expectations. Previously, investors betting on long-term U.S. Treasuries faced losses due to falling bond prices, but the rise of the 10-year Treasury yield above 5% has led to a reassessment of the allocation value of bonds.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.