Treasury Yield 5% Impact & Bond Valuation Explorer

MARKET EVENT

10-Year Treasury yield hit 5.00% — highest level since October 2023. Benchmark fixed income revaluation models are loaded.

Presets:

10-Year Yield 5.00% Risk-free benchmark

10Y Bond Price $935.38 Face Value: $1,000

Price Decline -6.46% Capital loss vs par

Est. 30Y Mortgage 7.75% +2.75% historical spread

S&P Earnings Yield 4.65% Implied from P/E 21.5

Equity Risk Premium -0.35% ERP Inversion (Bonds > Stocks)

Yield & Bond Parameters

Continuous direct manipulation dynamically recalculates macro valuation.

10-Year Treasury Yield 5.00%

3.00% (Post-pandemic) 5.00% (Oct 2023) 7.00% (1990s peak)

Bond Coupon Rate 4.25%

1.00% (Low rate era) 4.25% (Benchmark Note) 7.00%

Bond Maturity (Years) 10 Yrs

2Y (Short) 10Y (Benchmark) 30Y (Long Bond)

Mortgage Spread (%)

S&P 500 P/E Multiple

Modified Duration: 7.92 yrs

Annual Coupon Payment: $42.50

Total Discount to Par: -$64.62

Bond Price Sensitivity Curve

Price path of $1,000 par bond across 3.0% - 7.0% yield spectrum.

Active Yield: 5.00%

At 3.50% Yield $1,061.80

At 5.00% (Current) $935.38

At 6.50% Yield $838.10

1. Fixed Income Duration Shock

-6.46%

When the 10-year yield surged to 5.00%, newly issued bonds priced with 5% yields caused existing fixed coupon bonds (like the 4.25% coupon note) to drop to $935.38, inflicting instant capital losses on conservative balance sheets.

2. Real Estate & Mortgage Strain

7.75% Mortgages

Mortgage lenders price 30-year fixed conforming loans at a typical 2.75% spread above the 10-year Treasury. At a 5.00% benchmark, conforming 30Y mortgage rates jump to 7.75%, freezing buyer affordability.

3. Inverted Equity Risk Premium

ERP -0.35%

With equities priced at 21.5x earnings (yielding 4.65%), the risk-free Treasury yield of 5.00% offers a negative Equity Risk Premium (-0.35%). Investors receive less cash flow yield on volatile equities than guaranteed US government debt.

Yield Curve Sensitivity Matrix

Stepwise revaluation of 10-year note across yield shifts from baseline.

Compiled at 5.00% 10Y threshold

Yield Rate	Bond Price ($)	Price Δ vs Par	30Y Mortgage Est.	ERP vs S&P 500	Status