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Planning Insight | October 2026

Welcome Back to 2002

The 10-year Treasury yield crossed 5% last month for the first time since 2002.

For context, the last time borrowing money cost this much, the iPod was about a year old and held roughly a thousand songs. Most people were carrying flip phones and playing Nickleback on a CD player. You printed directions off MapQuest before leaving the house, and if you missed a turn, that was simply your problem now. Blockbuster was still charging late fees. American Idol was in its first season. And frosted tips, cargo pants, and velour tracksuits were all considered good ideas.

A lot has changed. Interest rates, apparently, have come back around.

Here is what happened, why, and what it means for you.

What happened

On September 16, the Federal Reserve raised its benchmark rate a quarter point to a range of 3.75% to 4%, the first increase since 2023. The vote was unanimous, which for twelve economists is nearly as rare as the hike itself.

The bigger story has been the bond market. The 10-year Treasury yield, which drives everything from mortgage rates to the value of the bonds you own, touched 5.34% before easing back to roughly 5.2%. The average 30-year mortgage is now around 7.5%.

Why it happened

The Fed’s move was about inflation. Energy prices have stayed stubbornly high, with oil touching $100 a barrel at points this year, and tariff effects are still working through the system. The Fed spent most of 2025 cutting rates. Firmer prices and a labor market that steadied faster than expected changed their math.

But the Fed only controls short-term rates. The move in long-term yields is a different animal, and it is happening everywhere. Yields jumped in the UK, Germany, and Japan at the same time. The drivers are unglamorous: governments running deficits and issuing more debt, aging populations, heavy spending on defense and energy infrastructure, and a wave of corporate borrowing to build out AI. Lenders want more compensation to part with money for thirty years. Hard to blame them.

What it means for you

If you hold cash, this is the good news. Money market yields are sitting near 3.5%. Not thrilling, but it is real money, and for most of the 2010s it was a rounding error. Anyone keeping a year or two of expenses outside the market is finally getting paid to do it.

If you hold bonds, this is the uncomfortable part. Bond prices move opposite to yields, so when rates rise, prices fall. Our bond positions are down about 2% this year. Bonds are supposed to be the boring part of your portfolio, and lately they have not been boring, which is never a compliment.

Two things worth knowing. First, if you have looked up one of your bond funds online and seen it down 5%, the internet is not lying exactly. It is just quoting price and leaving out the part where the fund pays you interest. Add that back and the actual return is closer to down 2.5%. Second, and this is the part that gets lost: higher rates mean every bond we buy from here earns more.

If you are borrowing, the math has genuinely changed. A mortgage at 7.5% is a different decision than one at 3%.

If you own stocks, the headlines have been louder than the results. The Dow dropped more than 600 points the afternoon of the Fed announcement, which made for good television. All three major indexes are still up on the year and on pace for a fourth straight annual gain.

What we are doing

Mostly, what we were already doing.

The bond portfolios we manage run an average maturity of roughly three and a half to four years. The standard intermediate benchmark is six to seven. That difference is deliberate, and it is the single biggest reason your fixed income has held up better than the broad bond market this year. Shorter bonds move less when rates move, and they mature sooner, which means we get to reinvest at today’s higher yields instead of waiting a decade for the privilege.

What we are not doing is guessing. Markets currently expect another quarter-point hike in December. Maybe. Markets have also confidently predicted a recession in roughly nine of the last three recessions. Repositioning a portfolio around a forecast that does not show up is a mistake you cannot undo.

Nobody is suggesting you dig the flip phone out of a drawer, revisit the frosted tips, or start burning mix CDs again. But it is worth remembering that the rate environment of the last fifteen years was the strange one, not this. Your plan was not built on the assumption that money stays free forever. It was built for a world where cash earns something and bonds pay interest.

That world is back. Welcome to 2002. The cargo pants, thankfully, can stay there.

What Caught Our Eye

A couple of charts and graphics we found insightful this month.

Does your college football roster cost $8M or $50M?

College football payroll (estimates) are now public enough to chart, and the spread is wider than the scoreboard usually suggests. Ohio State sits at the top at an estimated $49M to $54M, roughly six times what Boston College is spending. NC State and UNC land in the middle of the pack around $27M, which is a strange sentence to write about amateur athletics. The useful takeaway for the rest of us: spending more does not guarantee a result, but it does buy more chances at one.

Rates Affect Rent More Than You’d Think.

High rates mean builders build less. Less building means tighter supply. Tighter supply means rents climb, and rent is a large share of the inflation number, which keeps rates high. The higher the rates, the higher the rent doom loop. Wilmington has gone from roughly negative 4% rent growth to positive 3.5% in two years, and even Austin has clawed back five points. It’s a circle that’s hard to break from the inside.

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