Has the bond market hit rock bottom?

The 10-year Treasury yield has climbed nearly 150 basis points since before the Iran war began, making borrowing more expensive across the economy.

But with the U.S. midterm elections approaching, Apollo sees several reasons to think yields may be nearing a peak.

Has the 10-year yield reached a peak?

Apollo chief economist Torsten Slok believes the approaching midterms could increase the chances of a Middle East peace agreement or prompt the U.S. government to take steps to boost oil supplies.

Either could make inflation less of a worry by lowering energy costs and potentially sending bond yields lower.

Beyond oil, higher borrowing costs are already hurting housing and auto sales. Widening credit spreads among AI companies also suggest investors are demanding higher returns to lend to them.

The bond market is already responding

Slok published his note on Oct. 6, a week after the 10-year Treasury yield surged above 5.30% for the first time in more than two decades.

Since then, yields have fallen roughly 25 basis points, returning to the low 5% range. The retreat has coincided with a selloff in AI stocks, which may have drawn more investors into U.S. government bonds.

📌 Bottom line: If the 10-year Treasury yield has peaked, longer-duration bonds could be a great addition to a portfolio. Investors would earn interest while also benefiting from rising bond prices as yields fall.