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4h ago

U.S. 10-Year Treasury Yield Hits 5%

Heavy Treasury issuance, stronger Fed rate bets and a jump in oil prices are pushing the benchmark yield higher, raising borrowing costs across the economy.

El edificio del Departamento del Tesoro de los Estados Unidos en Washington.
Los bonos del Tesoro de EEUU registran una fuerte suba de rendimientos.

Overview

  • The 10-year Treasury yield reached about 5% on Monday, a level last seen briefly in 2023 and near highs not broadly seen since 2007.
  • Investors say large U.S. fiscal deficits and heavy new Treasury supply have pressured bond prices down and forced yields up.
  • Markets are pricing a high chance of further Federal Reserve rate increases, which has raised the return investors demand on longer-term government debt.
  • The rise in the 10-year yield has already pushed mortgage rates higher, with the average 30-year fixed rate climbing to around the mid-6 percent range and increasing monthly payments for homebuyers.
  • Yields are rising in other major economies as well, which can squeeze stock valuations, raise government interest bills on record U.S. debt, and shift global capital flows.