The move in rates has been real.
SEI Vantage: In focus
Vantage: In focus. Third quarter 2026
The third quarter of 2026 saw further geopolitical volatility in the Middle East and Eastern Europe, growing concerns over energy-product shortages and prices, and further tariff and counter-tariff measures from the U.S. and some of its trade partners. However, the main story was the sharp move higher in bond yields. While the third-quarter move was not the largest on record, changes in both 2- and 10-year U.S. Treasury yields were significant, falling into the 90th percentiles of quarterly changes since 1990.
The regime shift in yields is a clear indication that the global economy appears to have finally escaped the slow-growth, low-inflation, and low-interest-rate environment that prevailed between the Global Financial Crisis (GFC) of the late 2000s and the onset of COVID-19. While the rates move might feel disconcerting, it’s important to remember that the post-GFC, early-COVID-19 environment was historically abnormal. Granted, some features of the current economic and market environments are unique (budget deficits and demographics, for example), but current bond yields look far more normal than those that prevailed in much of the current century.
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