The 2023 US Treasury Yield Reversal: Expectations and Term Premiums
Use Federal Reserve researchers’ model comparisons to examine the rise and fall in Treasury yields during the second half of 2023 and why yield direction alone establishes neither causes nor stock-price responses.
Updated Oct 27, 2026
The period and the yield move
Federal Reserve researchers compared the rise in US 10-year Treasury yields from July (7) 26 to October (10) 19, 2023 with the decline through December (12) 29. Their table starts at 3.88%, adds 1.17 percentage points and subtracts 1.13 percentage points to reach 3.92% at year-end. These figures use that study’s yield series and measurement times.
Different estimates of the same movement
The researchers attributed an important role to term premiums in the rise, but the contributions of expected short rates and term premiums differed across models. During the decline, expectations gained relative importance in most models; survey responses may also have lagged market news. These are researchers’ estimates, not directly observed causal shares or a definitive policy-committee judgment.
Questions for a rebound thesis
Rather than assigning a single cause to falling yields, examine what changed and whether corporate funding conditions actually improved. Separating lower expected rates from lower risk compensation still does not mechanically determine stock-price reactions.
Limits for today’s semiconductor market
This is a historical US Treasury-market analysis. It does not verify current yield drivers, any semiconductor company’s earnings, a market bottom or the timing of a rebound. Estimates can vary with model choice and sample period.
Sources
- The Treasury Tantrum of 2023 — FEDS NotesAccessed Oct 27, 2026