At 5.25%, 10-Year Yields Turn a Longtime Bond Bear Bullish

The yield on the 10-year U.S. Treasury note touched 5.25% this week, its highest level in almost two decades, and that number has just converted one of the bond market's most persistent bears.

Jim Bianco, president and founder of Bianco Research and a well-known veteran market commentator, is turning bullish on Treasury bonds for the first time since the pandemic. He has been bearish on the asset class since 2020. Now he sees real value and is reversing his call.

The significance lies in the source. Bianco is not a strategist who drifted into pessimism last month. He has spent roughly six years on the bearish side of the trade, badmouthing Treasury bonds through the entire post-pandemic repricing. A reversal from that camp carries more information than a routine bullish note from a permabull.

His reasoning is straightforward. The wave of negative sentiment directed at inflation, the federal deficit and the U.S. debt mountain is, in his view, justified — but the market has already done the work. "That's now largely being reflected in the prices," Bianco said.

In other words, the bear case has become consensus, and consensus is already in the tape.

Bianco laid out his position in an interview on the David Lin report podcast on Monday, in an episode titled "Bond Market Turning Point: Why Jim Bianco Just Flipped." He was blunt about the limits of his own timing. "I'm not going to be smart enough to say 5.25% is the high," he acknowledged, "but we're getting close enough."

That phrasing matters. Bianco is not calling the exact top in yields — the exact bottom in prices. He is arguing that the risk-reward has shifted: at 5.25%, a buyer now earns what he describes as a big fat cushion of income that protects against further damage if yields keep climbing. The higher the starting yield, the more room a bond position has to absorb bad news before an investor loses money.

The market backdrop underscores the move. The 10-year yield stood at 5.227% in recent trading, according to MarketWatch data, holding near that multi-decade peak. Elevated yields have rippled across asset classes, competing with equities for capital; the S&P 500 traded at 7,670.84, down 0.17%, while gold fetched $4,219.10 an ounce, up 0.94%, on the day of the report.

The report comes from MarketWatch markets reporter Jules Rimmer, a London-based journalist who spent more than 30 years as a trader and stockbroker before moving to journalism in 2021, with stints at Salomon Brothers, ING Barings, Jefferies and Investec.

Bianco's own framing of the timing is perhaps the sharpest signal in the interview. In his assessment, the moment for aggressive positioning against bonds has passed. "The time to be outrageously bearish on bonds was two years ago," he said.

For allocators, the so-what is direct: one of the earliest and loudest bears on Treasuries is now saying the trade has run its course, and that income at these levels compensates investors for the remaining risks of inflation and fiscal deterioration. Whether 5.25% marks the peak or not, Bianco's turn suggests the marginal seller in the Treasury market may finally be running out of reasons.