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US Treasury 10-year term premium turns positive

The U.S. Treasury 10-year term premium, a measure of the compensation investors demand for holding long-term government bonds, has moved back into positive territory this week as yields touched fresh highs on inflation concerns. Term premiums, which can hurt assets such as stocks when they rise, have been suppressed for about a decade amid low interest rates that followed the 2007-2009 global financial crisis and the COVID-19 pandemic. They turned positive last year as widening fiscal deficits and higher government bond issuance helped lift long-term Treasury yields, which move inversely to prices.