Market history · Sovereign credit ·
Fitch downgrades the US; Treasury yields reach 5%
On 1 August 2023 Fitch Ratings cut the US from AAA to AA+, citing fiscal deterioration and governance concerns. Over the autumn, larger Treasury issuance and a resilient economy helped push the 10-year yield to about 5% in October, a level not seen since 2007.
Rising long-term yields hit bond prices and mortgage rates and weighed on equities, before yields fell back sharply in November as inflation eased.
The takeaway
Bonds are not risk-free in price terms; duration decides how much a rise in yields hurts.
This is a retrospective about a past event, provided for general information. It is not investment advice, does not describe RockLake's positioning at the time, and past performance is not a guide to future performance. Read the risk warning.