It’s deja vu all over again. – Yogi Berra
It’s deja vu all over again.
The path of the 10-year U.S. Treasury yield in 2026 is starting to look remarkably similar to its path in 2023. Through Sept. 30, the yield was up 112 basis points (bps), almost exactly matching the 110-bp increase through the Oct. 19, 2023, peak. September also marked the seventh consecutive month of higher 10-year yields, tying the longest streak in 50 years. The chart practically invites the familiar line about history rhyming.
Whether the underlying forces rhyme is a more difficult question. In both years, the 10-year yield fell early in the year, rose through the spring and accelerated higher as summer turned to fall. In 2023, the yield peaked on Oct. 19 before reversing much of that increase over the following three months. That raises a natural question: Does October tend to matter for Treasury yields?
Looking at when the 10-year has reached its annual high, January and October have each done so twice since 2020. Over longer periods, however, October does not stand out. Since 1980, January and March have been the most frequent peak months, while January, March and June have led since 2000.
Autumn can bring selling pressures, including tax-loss activity, quarter-end positioning and federal fiscal-calendar flows. While these flows sometimes pressure bonds, they do not provide a compelling explanation for why Treasury yields should reliably peak in October.
In 2023, the October peak had far more to do with market fundamentals than seasonality. After Washington’s debt-ceiling impasse ended in June, the Treasury Department rebuilt a depleted cash balance as privately held net marketable borrowing reached roughly $1 trillion in the third quarter. The Federal Reserve was also shrinking its balance sheet. Subsequent Fed research concluded that the rise in the 10-year yield from late July to October was driven primarily by a higher term premium, with Treasury issuance, quantitative tightening and economic uncertainty contributing.
Some of the same pressures are present in 2026. Treasury borrowing is projected at $739 billion in the third quarter and $628 billion in the fourth. Unlike in 2023, however, the Fed’s balance sheet is roughly stable. Real yields have again accounted for much of the increase in nominal yields. But the comparison only goes so far. The 2023 issuance surge was abrupt. In 2026, in contrast, heavy financing needs have been more persistent, while tighter policy expectations and an energy-driven inflation shock have played larger roles in the rise in yields.
The more useful lesson from 2023 might be what changed around the peak. By late October, the post-debt-ceiling cash rebuild was largely behind the market, and the Treasury later signaled a smaller increase in long-dated issuance than investors had feared. Inflation also softened, and expectations for Fed policy became less restrictive. The pressures that had driven the sell-off were no longer building with the same intensity.
The first nine months of 2026 have traced an unusually familiar path, even if the underlying drivers are not identical to those of 2023. Whether the resemblance survives October will provide another test of how far the comparison can be taken.
Between the Lines is a weekly blog by DoubleLine Portfolio Managers Sam Garza, Joseph Mezyk and Quant Analysts Fei He, CFA and Sunyu Wang that breaks down topical macro and market issues. For questions or suggestions please e-mail us at betweenthelines@doubleline.com. The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of DoubleLine Capital LP, its affiliates or employees.
