U.S. Treasury Yields Reach 5.12% Amid October Inflation and Record Budget Deficit

Key Facts

The 10-year U.S. Treasury yield rose to 5.12%, while the 30-year yield approached 5.45% at the close of the week of November 13, according to a report published by InvestingLive. Yields rose as October data showed consumer inflation accelerating beyond economists’ expectations, while the U.S. budget recorded a record deficit for the month. The figures add to concerns that interest rates will remain elevated for longer, as higher-than-expected inflation could leave less room for cuts. The deficit also highlights the scale of the government’s financing needs and borrowing costs. The report said the 10-year yield “rose to 5.12%, while the 30-year yield is approaching 5.45% at the end of the week.”

The headline consumer price index rose 0.4% in October from the previous month, after a 0.6% increase in September, exceeding economists’ forecast of a 0.3% rise, according to official data cited by Reuters via MarketScreener. The core index, which excludes food and energy, increased 0.3% during the month, compared with a consensus forecast of 0.2%. Together, the readings show that inflation was higher than expected in both the headline and core measures, despite a slower monthly increase in the headline index than in September. The core reading is particularly important in assessing persistent price pressures because it excludes volatile food and energy components. Reuters described the core index as a measure of underlying inflation, noting that it “came in at 0.3%, above the 0.2% consensus.”

The U.S. fiscal year 2027 began with an October deficit of $404 billion, a record for the month, according to Treasury Department data cited by Reuters. The deficit increased by $120 billion, or 42%, from October of the previous year. After adjusting for the timing of benefit payments shifted between October and the two fiscal years, the department said the deficit would have been $285 billion, up $94 billion, or 49%, from the same period. The adjustment shows that the timing of payments lowered the reported figure but did not change the direction of the year-over-year increase in the deficit. Reuters said the adjusted deficit “would have been $285 billion, up $94 billion, or 49%, from a year earlier.”

Government revenue fell by $35 billion, or 9%, to $369 billion in October from a year earlier, according to the report. Net customs duty receipts fell 39% to $19.2 billion, compared with $31.3 billion in October 2025. Government spending, meanwhile, reached $773 billion, a record for the month, up $84 billion, or 12%, from a year earlier. The increases included a $14 billion, or 80%, rise in Department of Agriculture spending and a $28 billion, or 30%, increase in military spending. The widening gap between revenue and spending reflects simultaneous pressure from declines in some receipts and higher outlays.

Total interest on federal debt rose by $11 billion, or 11%, from the previous October to $115 billion, according to Treasury data cited by Reuters. Interest payments increased in a month when government spending reached a record and the deficit hit its highest October reading. The figure highlights the cost of servicing debt in the budget, as long-term bond yields approached 5.45%. On financing, the Treasury Department said it expects to borrow $618 billion in privately held net marketable debt during the quarter from October to December 2026, assuming an end-December cash balance of $850 billion. Net private borrowing was $742 billion in the quarter from July to September, which ended with a cash balance of $984 billion.

Bond yields also rose in earlier sessions of the week, but those figures refer to dates different from the end-of-week report. On November 10, the benchmark 10-year Treasury yield rose 12.55 basis points to 4.988%, as U.S. stocks fell after inflation data, Reuters reported. The Associated Press said the yield reached 5.12% on November 12, compared with 4.98% late Tuesday, noting that bond markets were closed Wednesday for the Veterans Day holiday. These dated readings put the yield’s path during the week in context, while the level in the end-of-week report remains 5.12% for the 10-year note. Official borrowing estimates also cover the quarter through December 2026.