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Why 5.3% Treasury Yields Have Investors Watching Bonds

Market Movers: The Opening Bell

October 2, 2026

Video Transcript

Ahead of the new trading day. Let's go out to Chicago. FinTech TV contributor Errol Coleman is live from the Cboe trading floor. Good morning Ariel and happy Friday. What a week it's been. We finally got that jobs figure that we were all anticipating on the heels of PCE earlier this week. So what pre market activity are you tracking on this Friday?
Good morning Remy. Yeah, the activity I'm really watching this morning again is going to have to be in the bond market because bonds have just been getting killed. And we've essentially had seven straight days of yields pushing higher, with the ten year Treasury yield reaching about 5.3%. And these are levels we haven't seen since 2002.

And I think that this makes it interesting. It's interesting because the psychological impact of it for investors, we're conditioned to think about bonds as the boring, safer part of the portfolio. And now you have long duration bond investors looking at some pretty significant drawdowns while yields are still sitting at levels an entire generation of investors really hasn't had to navigate.

So I think there's a mix of frustration and uncertainty right now, but also opportunity. At some point, yields at these levels start becoming more attractive enough that investors ask whether they want to keep chasing risk assets or start looking in some of these yields. It's a tricky one, but that's the activity I'm watching this morning, Remy.

And of course, I do want to ask you about how Cboe traders out there are digesting the September nonfarm payrolls prints. So right now looking at Fed fund futures in terms of rate hike probability at the October meeting, we are looking at it hovering right around the 17% level. But overall, what does this mean as we head into the final months of 2026?

Yeah I mean I think this.

Ties right back into bonds, right? We just got a pretty big miss on jobs. Only 29,000 added with unemployment ticking up to 4.2%. That could really give bond some relief. And we're already seeing equities respond positively. With the Nasdaq and S&P 500 sitting near all time highs. This could definitely add some feel to that move and going into the holiday season.

Maybe we're getting that Santa Claus rally a little bit earlier than anticipated.

Well Ariel, appreciate your time this morning. Thank you so much for weighing in. And thank you so much for all of your insights.

Thank you Remy.

U.S. Treasury yields remain in focus as the final months of 2026 begin, with the 10 year Treasury yield reaching around 5.3%, levels not seen since 2002. FinTech TV contributor Errol Coleman joins us from the Cboe trading floor in Chicago to discuss the pressure in the bond market and what higher yields mean for investors.

Coleman highlights the challenges facing long duration bond investors as yields continue to rise, with investors reassessing the traditional role of bonds in their portfolios. He also discusses whether higher yields could eventually make bonds more attractive compared with other risk assets as markets navigate elevated rates and uncertainty.

The conversation also looks at the latest September jobs report, which showed 29,000 jobs added and unemployment rising to 4.2%. Coleman explains how the weaker employment data could provide some relief for bonds while supporting continued strength in equities, with the Nasdaq and S&P 500 trading near record levels.

With the holiday season approaching, Coleman also discusses the potential for further equity market momentum and what traders are watching as expectations for Federal Reserve policy evolve into the final quarter of 2026.

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