The 10-year Treasury is having its worst run in over 100 years. Why investors are buying bonds anyway.

The 10-year Treasury note is in the midst of its worst stretch in more than a century, as yields have climbed sharply and bond prices have fallen. Prices and yields move in opposite directions, so a prolonged rise in yields translates into sustained losses for existing bondholders. That dynamic explains why long-duration bonds have struggled even as the income they offer has grown.

That growing income is precisely what is drawing fresh buyers. As one strategist put it, “The higher that yields go — for at least new money — it becomes more enticing to think about putting money into bonds.” In other words, investors putting capital to work today can lock in higher coupon payments than they could when yields were lower, even if older holdings remain underwater.

The key distinction is between new money and existing positions. Higher yields compensate new buyers more generously, while past purchases may still show paper losses. What to watch from here: the path of inflation, Federal Reserve policy expectations, and upcoming Treasury auctions, since these shape whether yields keep climbing or stabilize — and how attractive bonds look relative to other assets.