If your mortgage or car loan feels heavier lately, the bond market is part of the story. On Monday the 10-year Treasury yield rose to about 5.25 percent, its highest since 2007, and the 30-year climbed to roughly 5.55 percent, the highest since 2004. That 10-year number matters because so many borrowing costs, from mortgages to auto loans, loosely follow it.
Analysts point to several causes: stubborn inflation, higher oil prices tied to the Iran conflict, heavy government and corporate bond issuance, and an AI-fueled borrowing boom. The Federal Reserve raised rates by a quarter point earlier this month, its first hike since 2023, and traders bet another could come in October. Investors are also demanding extra compensation for holding long-term debt while deficits keep growing. Economists disagree on whether this reflects a strong economy or nervousness about U.S. debt. Either way, borrowers could face expensive credit for a while.
