DoubleLine: October Treasury Yield Peak Driven by Supply, Not Seasonality

The path of the 10-year U.S. Treasury yield in 2026 is starting to look remarkably similar to its path in 2023. Through Sept. 30, the yield was up 112 basis points (bps), almost exactly matching the 110-bp increase through the Oct. 19, 2023, peak. September also marked the seventh consecutive month of higher 10-year yields, tying the longest streak in 50 years. This chart similarity invites the question: Does October tend to matter for Treasury yields?

DoubleLine Portfolio Managers Sam Garza and Joseph Mezyk, along with Quant Analysts Fei He and Sunyu Wang, note in their latest blog that while history may rhyme, whether the underlying forces rhyme is a more difficult question. Looking at longer periods, since 1980, January and March have been the most frequent peak months, while January, March and June have led since 2000. October does not stand out. While autumn can bring selling pressures, including tax-loss activity, quarter-end positioning and federal fiscal-calendar flows, they do not provide a compelling explanation for why Treasury yields should reliably peak in October.

In 2023, the October peak had far more to do with market fundamentals than seasonality. After Washington’s debt-ceiling impasse ended in June, the Treasury Department rebuilt a depleted cash balance as privately held net marketable borrowing reached roughly $1 trillion in the third quarter. The Federal Reserve was also shrinking its balance sheet. Subsequent Fed research concluded that the rise in the 10-year yield from late July to October was driven primarily by a higher term premium, with Treasury issuance, quantitative tightening and economic uncertainty contributing.