Treasuries face risk of further losses as weak seasonal stretch extends into October
Seasonal weakness is deepening pressure on the U.S. Treasury market as September tracks toward another poor monthly performance. Historical data for the past decade suggest October also tends to bring losses, adding to concerns tied to the U.S.-Iran war, fiscal strains and a hawkish Federal Reserve.
Highlights
- Treasuries have posted a median loss of 0.9% in September and 0.7% in October over the past decade, per Bloomberg data.
- This September is on track to be the worst for Treasuries since 2023, extending their historically weak seasonal trend.
- Ongoing U.S.-Iran war, fiscal concerns, and a hawkish Federal Reserve are increasing the likelihood of further Treasury losses into October.
Seasonal trend points to continued weakness
As reported by Bloomberg, Treasuries have posted a median loss of 0.9% in September over the past decade, followed by a 0.7% median decline in October, based on data compiled by the news organization.This September is already shaping up to be the worst for Treasuries since 2023, extending the market's historically weak seasonal pattern and leaving investors with little indication of near-term relief.
War, fiscal worries and Fed stance weigh on outlook
The risk of another month of losses is rising as the ongoing U.S.-Iran war adds uncertainty to global markets and reinforces demand for closer scrutiny of government borrowing conditions.At the same time, fiscal concerns and a hawkish Federal Reserve are keeping pressure on Treasuries, a combination that suggests the market's difficult stretch may continue into October.
In our earlier coverage of the global sovereign bond selloff, we explained how rising energy costs and stronger growth expectations were forcing investors to reprice the path of interest rates and pushing yields sharply higher across major economies. That piece also highlighted how fiscal risks, heavy debt issuance, and policy uncertainty were amplifying volatility and tightening financing conditions for companies and households heading into key economic data and budget debates.
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