Why Every Trader on Earth is Watching the 10-Year Treasury Now with Nick Colas
August 24, 2026
AI Summary
5 min readThe 30-year Treasury yield recently hit fresh 15- to 20-year highs, and the cause is not what most market commentary suggests. Nick Colas, co-founder of DataTrek Research, joins the podcast to explain that inflation expectations have been "dead flat" since 2010, hovering consistently between 1.5% and 2.5%. The real driver of higher long-term yields is something else entirely: real interest rates.
What is actually pushing yields higher
Nominal Treasury yields can be decomposed into two components: expected inflation and the "real yield" that remains. Colas shows a chart going back to 2010 where the inflation expectations line is essentially flat. What has moved dramatically is the real rate — the residual after stripping out inflation. Real rates have pushed from roughly 2% toward 3%, and that is the entire story behind higher long-term yields.
This shift has been devastating for long-duration Treasury holders. Colas notes that TLT, the popular iShares long-term Treasury ETF, compounded at nearly 8% annually through the 2010s. In the 2020s, its compound annual growth rate has been negative 4.4%. For allocators who treated long Treasuries as a permanent portfolio hedge — an asset that rallies when equities fall — this has been a painful unwind. The hedge has become a drag.
Colas identifies four structural reasons real rates are elevated:
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What you'll learn
- 1 (00:36) **Why the 10-Year Treasury is the Market's Front Burner** - Nick Colas explains that long-term Treasury yields are the most important topic for investors right now, and breaks down what is driving the recent volatility.
- 2 (04:12) **The Mechanism: Real Rates vs. Inflation Expectations** - A detailed look at the chart showing nominal yields, inflation expectations, and the "real yield" residual that is driving the move.
- 3 (06:29) **The Portfolio Hedge is Broken** - The traditional role of long-term Treasuries as a risk-off hedge has been disrupted, forcing allocators to rethink their fixed-income strategies.
- 4 (07:33) **Four Drivers of Rising Real Rates** - Nick lists the four fundamental forces pushing real rates higher, starting with the unwind of Fed policy.
- 5 (10:11) **The AI Borrowing Boom: Why Google Bonds Compete with Treasuries** - Nick double-clicks on the fourth driver, explaining how $1.75 trillion in corporate bond issuance is pulling demand away from U.S. government debt.
- 6 (15:08) **The Equity Investor's Trigger: The 5% 10-Year Yield** - Nick identifies the critical level where rising rates begin to threaten the stock market and corporate earnings.
- 7 (18:19) **Why 2022's Playbook Doesn't Apply Anymore** - The "get out of jail free card" from the last rate hike cycle has expired because the largest companies have fundamentally changed their capital structures.
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Guests on this episode
Show Notes
On this episode of What Did We Learn, Josh Brown and Nick Colas discuss rising long-term Treasury yields, why real yields not inflation are driving the move, and what higher rates could mean for stocks. Plus, they break down S&P 500 valuations, the earnings revisions powering this year’s gains, three paths to new highs, and more insights from DataTrek’s latest research.
This episode is sponsored by F/m Investments and SGVA, the F/m Accumulator Ultrashort Treasury ETF. To learn more about SGVA, visit Fminvest.com/SGVA
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