Key Takeaways
- Median 12-month result after a fall of at least 1.5 points in the 10-year yield within a year: +22.0%, against +13.5% for all months, a gap of 8.4 percentage points above the all-months median.
- Higher in the 12 months after 9 of 10 episodes (90%), compared with 77% of all months.
- The range was wide: -7.0% after October 1998 to +47.9% after August 1982.
- Median over 3 months +2.3% (all months +3.0%); over 36 months +49.2% (all months +38.6%).
- Episodes overlap with recessions, policy changes and valuation swings, so the record shows what followed, not what the trigger caused.
What the Historical Record Shows
An episode is counted in the month the 10-year Treasury yield is at least 1.5 percentage points lower than 12 months earlier. After one is counted, the next is counted only once 12 months have passed without the condition, so a long spell is one episode. The data run from December 1971 to September 2026, and 10 episodes have a full 12-month window.
A fall of 1.5 points or more in the 10-year yield within a year lowers discount rates and borrowing costs, and it often coincides with slowing growth or easing policy.
| After the trigger | Episodes | Median | Average | Higher | All months: median | All months: higher |
|---|---|---|---|---|---|---|
| 3 months | 10 | +2.3% | +1.7% | 7 of 10 | +3.0% | 67% |
| 12 months | 10 | +22.0% | +20.4% | 9 of 10 | +13.5% | 77% |
| 36 months | 10 | +49.2% | +57.2% | 10 of 10 | +38.6% | 90% |
The comparison column uses every month in the record, whether or not a trigger had occurred. Dropping any one episode moves the 12-month median between +19.2% and +24.7%.
Every Episode
| Month | What changed | 3 months later | 12 months later | 36 months later |
|---|---|---|---|---|
| March 2020 | 10-year yield 2.57% to 0.87% | +13.2% | +34.2% | +33.7% |
| February 2012 | 10-year yield 3.58% to 1.97% | +2.9% | +19.2% | +54.0% |
| December 2008 | 10-year yield 4.10% to 2.42% | -31.9% | +28.0% | +77.3% |
| May 2003 | 10-year yield 5.16% to 3.57% | +8.2% | +26.1% | +94.9% |
| January 2001 | 10-year yield 6.66% to 5.16% | +1.7% | +13.0% | +67.5% |
| October 1998 | 10-year yield 6.03% to 4.53% | -3.2% | -7.0% | +25.7% |
| October 1995 | 10-year yield 7.74% to 6.04% | +8.2% | +24.7% | +44.4% |
| March 1993 | 10-year yield 7.54% to 5.98% | -2.9% | +1.7% | +19.6% |
| May 1985 | 10-year yield 13.41% to 10.85% | +1.5% | +16.6% | +31.1% |
| August 1982 | 10-year yield 14.94% to 13.06% | +19.5% | +47.9% | +123.8% |
All 10 episodes, newest first. "Not yet" means the window has not finished.
Why the Result Differs From Episode to Episode
Equity REIT returns are the FTSE Nareit All Equity REITs total return, monthly from 1972 with dividends included. Listed REITs trade like stocks and respond to interest rates and property fundamentals.
Triggers and the S&P 500 series use monthly averages of daily closes, so results are read only at horizons of three months or longer, and the series before 1913 splice earlier price indexes and are less precise. Results are nominal, before inflation, taxes and fees, and use the reference month of each statistic: inflation and unemployment figures were published after the month ended, so an investor reacting to the release would have started a few weeks later.
Triggers rarely occur alone. An inflation rise, a rate rise and a valuation fall can all begin within the same year, and a recession can start before or after any of them, so each episode mixes several influences and the average hides how different the individual cases were.
What to Watch
The indicators that define or accompany this trigger:
- 10-Year Treasury Yield: Latest Reading, Historical Chart, Release Date & Investor Guide
- 10-Year Real Yield: Latest Reading, Historical Chart, Release Date & Investor Guide
- Fed Funds Target Range: Latest Reading, Historical Chart, Release Date & Investor Guide
- 10y3m Yield Curve Spread: Latest Reading, Historical Chart, Release Date & Investor Guide
- CPI: Latest Reading, Historical Chart, Release Date & Investor Guide
Frequently Asked Questions
What happened after the most recent episode?
The most recent episode with a full 12-month window began in March 2020 (10-year yield 2.57% to 0.87%). Over the next 12 months, U.S. equity REITs (the FTSE Nareit All Equity REITs total return) returned +34.2%, against a median of +13.5% across all months.
How often did equity REITs end higher in the 12 months after a fall of at least 1.5 points in the 10-year yield within a year?
In 9 of 10 episodes (90%). Across all months since 1971, 77% of 12-month windows ended higher.
Is this a reliable signal for investing?
The record does not support treating it as one. The 12-month results ranged from -7.0% to +47.9%. Dropping any one episode moves the 12-month median between +19.2% and +24.7%. The episodes also overlap with other events that move markets. It describes what followed in the past, not what will follow.
How is the result measured?
An episode is counted in the month the 10-year Treasury yield is at least 1.5 percentage points lower than 12 months earlier; the next is counted only after 12 months without the condition. Forward results are measured from that month over 3, 12 and 36 months using U.S. equity REITs (the FTSE Nareit All Equity REITs total return). Triggers and the S&P 500 series use monthly averages of daily closes, so results are read only at horizons of three months or longer, and the series before 1913 splice earlier price indexes and are less precise. Results are nominal, before inflation, taxes and fees, and use the reference month of each statistic: inflation and unemployment figures were published after the month ended, so an investor reacting to the release would have started a few weeks later.