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 enduring its worst stretch in more than a century, a selloff driven by persistent inflation, heavy government issuance and expectations that central banks will keep policy tight for longer. Bond prices and yields move inversely, so this historic run of weakness is really a story about yields climbing to levels not seen in years.

That apparent contradiction — poor performance, yet renewed buying interest — makes more sense when you separate price from income. Existing bondholders have absorbed paper losses as prices fell, but investors putting new money to work now can lock in far higher yields than they could for most of the past decade. As one strategist put it, the higher yields go, at least for new money, the more enticing bonds become.

What to watch: whether yields stabilize or keep climbing, how inflation data and central-bank guidance evolve, and whether demand holds at upcoming auctions. For long-term investors, the episode is a reminder that a bond's total return depends on both price and the income it generates — and that entry yield shapes the returns a buyer can expect.