Four-Year High for the 10-Year Yield

10-year Treasury yields continued moving north this week, surpassing 3% for the first time since January 2014. The increase snapped a months-long trading range amid the prospect of a deluge in new government debt and a Federal Reserve intent on raising interest rates. Increasing government budget deficits combined with the trimming of the Fed’s balance sheet supports the notion that the amount of new Treasury issuance (debt) will surge in years ahead. Why does this matter? Because more bonds theoretically means more pressure on market interest rates.