CNBC Television · Sep 24, 2026
With Megan Horneman, Chief Investment Officer at Verdence Capital Advisors
The 10-year Treasury yield was at its highest in almost 20 years when Megan Horneman came on air, and she does not expect the rise to end soon.
The anchors said stocks had held up better than they expected after an 18 basis point jump in the 5-year yield the day before. Horneman expects that to change, because bonds now compete with stocks for money and AI companies can no longer borrow as easily to pay for their spending.
"I think that if the yields keep rising like this that we could be in for a pretty messy end of year."
Megan Horneman, chief investment officer at Verdence Capital Advisors, on CNBC, put the rise down to oil, deficits, a Fed that is still raising rates and fewer foreign buyers of Treasuries.
The full segment is covered here so you can skip it.
Here are the 4 calls that matter.
Key Takeaways
Rising yields are a headwind for stocks because bonds now compete with the earnings yield on stocks
AI companies can no longer borrow as easily to fund their spending
Oil, deficits, Fed hikes and fewer foreign buyers are all pushing yields up at once
Japan and China hold the fewest Treasuries in about 15 years, she said
Buyers may step in around 5.50% on the 10-year, in line with nominal growth of about 6%
The Fed could bring long-term yields down by convincing markets it will control inflation, and it is not there yet
1. Yields as a Stock Headwind
The anchor opened with the curve: the 10-year yield at its highest in almost 20 years, the 30-year at 5.43%, the 5-year above 5% and the 2-year at 4.89%. The anchor said the 5-year yield rose 18 basis points the day before, and that stocks had held up better than that move suggested.
She expects yields to keep rising and stocks to feel it
Horneman said the higher yields are a headwind because she does not see the move ending soon. Investors will eventually compare the earnings yield on stocks with what bonds pay.
"There's a lot of competition there right now." — Megan Horneman
AI spending has relied on borrowed money
Much of the stock market, and the AI sector in particular, has used the debt market to pay for its capital spending, she said.
"They don't have that source of funding as easy as it was once before." — Megan Horneman
"So, I think that you're going to get some more volatility in the equity market." — Megan Horneman
