After a relentless downward move for much of August, long-term interest rates have started to stabilize in the last week or so and have even started to show small upward moves. Take the 30-year US Treasury yield, for example. After hitting a low of 1.90% on August 28th, the 30-year yield has moved up to 2.09%.

While a small increase in yields may not seem like a lot, the further out into the future the maturity of that asset is, the bigger the impact the move in interest rates will be on its price. Let’s take an extreme example using the Austrian 100-year bond that was issued in late 2017 and matures in September 2117. As the frenzy for yield has eased since late August, the price of the Austrian 100-year bond has dropped over 15%. That’s a pretty big move for a relatively small increase in yields! To be fair, it works both ways. When yields were falling, the price of the Austrian 100-year was one of the top-performing assets in the entire financial universe, and even after the recent decline, it is still up 57% YTD. If rates keep rising, those big gains investors have seen in their long-term fixed-income holdings this year will reverse sharply.