# Treasury Bonds Outpace Stocks by 1.13 Points

> Treasury bonds now pay 4.98% vs. stocks' 3.85% yield, a gap last seen in 2009.
- Title: Treasury Bonds Outpace Stocks by 1.13 Points · 24/7 Wall St.
- Summary: Treasury bonds now pay 4.98% vs. stocks' 3.85% yield, a gap last seen in 2009. Treasury bonds pay 4.98% on $100,000 vs.
- Keywords: treasury bonds, s&p 500, yield gap, warren buffett, stock prices, interest rates, investment strategy, ira funds, dividends, earnings yield, 24/7 Wall St.
- Source: 24/7 Wall St. — https://247wallst.com/investing/2026/11/12/treasury-bonds-now-pay-more-than-stocks-earn-by-a-gap-last-seen-in-2009-warren-buffett-warned-in-1999-what-that-does-to-stock-prices
- Author: Jeremy Phillips
- Published: 2026-11-13T02:47:00+00:00
- Read time: 1 min
- Topics: treasury bonds, s&p 500, yield gap, warren buffett, stock prices, interest rates, investment strategy, ira funds, dividends, earnings yield
## Treasury Bond Yield
A 10-year Treasury bond closed at 4.98% yield, while the S&P 500 earns 3.85% on $100,000.
## Yield Gap Analysis
The bond pays $4,980 annually on $100,000 versus $3,850 from the S&P 500 index fund.
## Historical Context
The 1.13-point gap is the widest since October 2009 and last seen in 2009.
## Warren Buffett's Warning
Buffett described interest rates as gravity pulling stock prices down, a concept from 1999.
## Historical Patterns
Three periods saw the bond yield exceed stock earnings: 1999-2002, 2002-2009, and 2026.
## Gary and Linda's Scenario
Gary and Linda have $1.7 million in an IRA: $1.5 million in S&P 500 and $200,000 in cash.
## Current Income Comparison
The bond pays $74,700 annually on $1.5 million versus $57,750 in stock profits.
## Investment Strategy
Moving $500,000 to bonds increases annual cash income from $15,900 to $35,500.
## Historical Outcomes
In 1999-2002, stocks fell 41% while bonds held steady; in 2009, stocks rose 68%.
## Earnings Growth
S&P 500 earnings grew 9.4% annually over ten years, reaching $298.03 per share.
## Wall Street Forecast
Wall Street forecasts the S&P 500 to earn 5.45% on $100,000, closing the yield gap.
## Long-Term Outlook
The bond covers 15 years of spending for Gary and Linda, regardless of market direction.
## Buffett's Advice
Buffett recommends 10% bonds and 90% S&P 500 for retirement portfolios.
## Key takeaway

Treasury bonds pay 4.98% on $100,000 vs. stocks' 3.85% yield, a 1.13-point gap last seen in 2009.