Is the 10-Year Treasury Yield Near a Major Top? Oil Says Not Yet

A 24-year high in a bond yield usually reads as a warning that rates have further to climb. The US 10-year treasury yield spiked to roughly 5.35% this week before slipping back to around 5.2%. One macro strategist looks at that same chart and sees the opposite signal: a major top.

The stakes reach well beyond bond desks. The 10-year sets the price of mortgages and corporate loans, and it is moving while Brent crude sits above $100 a barrel. The Federal Reserve also has two meetings left this year (27-28 October and 8-9 December), with a presidential election on 3 November between them.

For energy and mining investors, getting the direction of both rates and oil right decides whether current earnings hold up or compress.

Here is how the “major top” call holds up against the current data, where its oil forecast looks weakest, and which dates are most likely to settle the argument.

Why the 10-year treasury yield jumped 60 to 70 basis points in five weeks

The climb started quietly. According to Associated Bank, the 10-year opened September at 4.80% and closed the month at 5.28%, its highest level since 2007. That is a 48 basis point move in a single month (a basis point is one hundredth of a percentage point).

Then October added more. The Globe and Mail recorded a peak of 5.364% on 7 October, while Investopedia reported the yield nearing 5.37% that morning before easing to about 5.29% after the 10-year auction. TradingEconomics put an earlier high above 5.34%. The exact top depends on the source, but all three land in the same narrow band.

The mainstream explanation comes from BBVA Research, which describes markets as “out-hawking the Fed”: investors are pricing a longer stretch of tight policy because growth looks resilient. Fiscal worries add weight, with deficits and rising interest costs feeding concerns about heavy Treasury issuance.

The structural forces behind rising yields, including Japanese capital repatriation and heavy sovereign issuance, give the bearish case on bonds more weight than Hunter’s sentiment-based reading allows, and that is the main counterargument to a major top.

David Hunter, chief macro strategist at Contrarian Macro Advisors, argues psychology did as much work as fundamentals. In his reading, the yield keeps stalling in a 5.30-5.36% zone last tested in 2007, while sentiment has turned so bearish that a 6% yield is openly discussed.

The contrarian burden of proof Hunter’s view is that tops in rates and bottoms in bonds always feel uncomfortable to buy, so the burden of proof sits with those insisting bonds have further to fall.

A yield parked at a 20-year resistance level, with sentiment at an extreme, tells you the easy part of the move is probably done. That does not guarantee a reversal. It raises the stakes on the next signal from the Fed.

Will the Fed hike in October or December?

Bond markets are leaning hawkish. Whether the Fed actually delivers is a far narrower question, and the evidence behind it is thinner than the yield chart suggests.

What the Fed could do

Hunter points to Fed Governor Christopher Waller‘s recent suggestion that more hikes may be needed. Hunter doubts the Fed will act before the election, which would make the October meeting more about signalling than action. The catalyst calendar looks like this:

• 27-28 October: Federal Open Market Committee (FOMC) meeting, the Fed’s rate-setting body, likely to be read for tone
• 3 November: US presidential election
• 8-9 December: FOMC meeting, the live decision point for any hike

Hunter’s case for patience rests on inflation, which he describes as still above 3% depending on the measure but showing early signs of rolling over. He also says federal interest costs now exceed $1 trillion. That figure is his, and it captures the fiscal pressure bond bears keep citing.

What the data gap means

Hunter’s downside inflation surprise therefore remains unproven.

The only official marker available is a projection. The Congressional Budget Office (CBO) forecast on 11 February 2026 that the fed funds rate would fall to 3.4% in Q4 2026. That is a projection made eight months ago, not a current setting.

If the Fed holds and inflation softens, the “higher for longer” pricing that lifted yields loses its footing. For you, that means inflation prints and Fed language deserve as much attention as the policy rate itself.

Can oil fall from above $100 to the $60s?

Hunter’s oil argument has a clear logic. Prices peaked near $120 when the Iran war began, eased to about $105-106 in late summer, then slipped below $90. He expects that stair-step decline to continue, slowed by inventory rebuilding and pipeline work, with oil in the $60s by year-end and possibly the $30s in a later bust ahead of a 2027 recession.

The current tape disagrees.

Brent closed at $104.28 and WTI at $91.49 yesterday, according to CNBC, after Iran stepped up attacks on tankers. Before the war, Hormuz carried about 20% of global oil and fuel, and Virginia Business reports last week’s tanker attacks were the most intense since fighting began.

Hunter has described Hormuz flows as close to normal. CNBC’s data shows about 9.5 million barrels per day (bpd) of crude leaving the strait, roughly 30% below prewar levels, while total Middle East flows including bypass pipelines reached 16.4 million bpd, near prewar. Both claims can be partly true: pipelines are rerouting supply around a choke point that remains impaired.

Bypass pipelines are why Gulf exports can look near normal in aggregate while the strait itself remains impaired, a distinction that explains much of the disagreement between Hunter and the tanker data.

The tanker figure comes from IMF PortWatch via the Straits Daily Brief. Reaching the $60s would likely require a sharp demand shock, an inventory glut or a lasting peace, and none of these is visible yet.

The read for you: the oil leg is the weaker half of Hunter’s thesis. A top in yields does not automatically deliver cheaper oil, and treating them as one trade bundles two very different bets.

What yields, oil and inflation mean for energy and mining investors

How rates and oil reach equities

Two channels carry this macro debate into share prices. The first is the discount rate, the return investors demand to justify holding a stock. When the 10-year rises, that bar rises too, and future earnings are worth less today, so valuation multiples shrink.

The second is oil itself. It sets producer cash flow directly and feeds consumer inflation through fuel and heating bills. Housing shows how quickly rates bite: with the 10-year near 5.2-5.3%, mortgage costs sit well above 2010s levels, squeezing affordability and sales volumes.

Three scenarios to stress-test

History adds a caution. In 2007, a 10-year near 5% arrived alongside high oil and financial imbalances, and periods when both spike together have often preceded slower growth. Hunter maps today onto that pattern: strong AI and reshoring-driven manufacturing, strained consumers and a recession in 2027.

BBVA’s counterweight is resilient growth that keeps yields elevated and geopolitics that keeps oil supported. On that view, recession risk rests more on policy mistakes than on a collapse in rates or crude.

Whether you hold producers, miners or rate-sensitive stocks, your portfolio quietly assumes one of these three scenarios. Name which one, then test it against the catalyst calendar.

For readers weighing how producers behave through these swings, our dedicated guide to energy stocks across a commodity cycle shows how earnings and valuations shift as prices rise and fall.

Weighing a contrarian call against a risk-supported market

The yield half of Hunter’s thesis has technical support: the 10-year keeps stalling at the 2007-era resistance zone while sentiment sits at a bearish extreme. The oil half is on weaker ground, contradicted by Brent above $100, impaired Hormuz traffic and a lack of institutional forecasts in the $60s.

This remains one strategist’s high-conviction view.

The debate is likely to be settled by a short list of events: the 27-28 October FOMC tone, the 3 November election, the 8-9 December FOMC decision, the next inflation prints and daily tanker counts through Hormuz. Watch those before assuming either side has won.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions. Past performance does not guarantee future results. Financial projections are subject to market conditions and various risk factors, and forward-looking statements are speculative and subject to change.