What happened last time? › Interest rates
What happens when the 2-year Treasury yield is above 5%?
It has happened 8 times since 1976. A year after it began, the S&P 500 was up 6 of 8 times, with a median move of +9.3%. On an ordinary day in the same years the median was +11.6%, up 78% of the time.
2-year Treasury yield above 5. Not true on 2026-09-25.
What came next
| 1 month later | 1 year later | 3 years later | |
|---|---|---|---|
| S&P 500 | +2.5% 63% up · n 8 · normal +1.2% | +9.3% 75% up · n 8 · normal +11.6% | -0.7% 43% up · n 7 · normal +34.0% |
| Gold | -0.7% 38% up · n 8 · normal +0.2% | +17.7% 75% up · n 8 · normal +5.3% | +84.8% 86% up · n 7 · normal +12.5% |
| Oil | +6.3% 63% up · n 8 · normal +0.2% | +6.0% 63% up · n 8 · normal +1.6% | +18.6% 86% up · n 7 · normal +9.2% |
| 10-year yield (pts) | -0.02 pts 50% up · n 8 · normal -0.01 pts | -0.50 pts 38% up · n 8 · normal -0.09 pts | +0.17 pts 57% up · n 7 · normal -0.45 pts |
| Inflation, CPI y/y (pts) | +0.05 pts 50% up · n 8 · normal -0.01 pts | +0.03 pts 50% up · n 8 · normal +0.03 pts | -0.34 pts 43% up · n 7 · normal -0.28 pts |
| Unemployment rate (pts) | +0.05 pts 50% up · n 8 · normal 0.00 pts | +0.05 pts 50% up · n 8 · normal -0.30 pts | +1.00 pts 71% up · n 7 · normal -0.80 pts |
Median move after each episode began, how often it rose, and how many episodes had data. "Normal" is the same move from any trading day in the same years.
Every time it happened
- 2024-04-30 · true for 1 trading day · S&P 500 a year later: +10.6%
- 2023-08-22 · true for 36 trading days · S&P 500 a year later: +28.1%
- 2023-03-08 · true for 1 trading day · S&P 500 a year later: +29.2%
- 2007-06-07 · true for 8 trading days · S&P 500 a year later: -8.7%
- 2006-05-10 · true for 41 trading days · S&P 500 a year later: +12.7%
- 1999-02-24 · true for 448 trading days · S&P 500 a year later: +8.0%
- 1994-03-18 · true for 1108 trading days · S&P 500 a year later: +5.2%
- 1976-06-01 · true for 4036 trading days · S&P 500 a year later: -2.9%
- 8 separate episodes: a new one starts after 30 days without a match, so one long selloff counts once.
- Few episodes: read the ranges and the interval, not just the median.
- Try enough situations and one will look like an edge by chance.
- Macro numbers are as published at the time. Stocks include companies that later died.
More about interest rates
- What happens when the 10-year Treasury yield is above 5%?
- What happens when the 10-year Treasury yield is above 8%?
- What happens when the 10-year Treasury yield is below 2%?
- What happens after the 10-year yield rises 1 point in a year?
- What happens after the 10-year yield rises 2 points in a year?
- What happens after the 10-year yield falls 1 point in three months?
- What happens when the 30-year Treasury yield is above 5%?
- What happens when mortgage rates are above 7%?