The 10-year U.S. Treasury yield crossed 5% in mid-September, its highest level since 2007, after starting the year near 4.17%. Clients have asked whether 5% is a threshold to worry about, and our view is that why yields moved matters more than the level. This piece looks at four forces behind the rise: higher real rates, a rising term premium, a shift from a savings glut to a bond glut, and borrowing by AI hyperscalers to fund data centers. It also covers what higher yields mean for stocks, bonds, and borrowers, and what we are watching next.

Germany’s 10-year government bond, negative 0.5% during the pandemic, now yields about 3.46%, while the UK’s has climbed to 5.5% and Japan’s to about 3%. International equity portfolio manager David Ragan examines what the rise in global rates means for how the team values companies. He explains why higher discount rates change the math on future cash flows, how a bank in Ireland became attractively priced once its post-crisis turnaround was overlooked, and why the team treats China’s low risk-free rate as artificially depressed. Above all, he returns to a simple idea: the value of diversification.

Canadian investment-grade bonds returned roughly negative 3% in the third quarter of 2026, while stock markets in many parts of the world ended September at or near all-time highs. Institutional portfolio manager Kevin Minas and investment counsellor Stu Morrow review the quarter, from oil above $100 a barrel and a more hawkish Fed to bond yields at multi-year highs across developed markets. They also discuss hyperscalers borrowing over US$200 billion this year, a rally in which more than half of the S&P 500 sits 20% below its peak, and whether 40% in traditional bonds is still the right number.