Rising bond yields threaten to push up U.S. borrowing costs, experts say
The U.S. bond market influences how much American consumers pay for loans and the interest they can earn on their savings accounts.
Bond yields have climbed to multi-decade highs as investors flee government bonds, driven by rising inflation, higher energy prices, and fears of a prolonged U.S.-Iran conflict, according to experts. The 10-year Treasury yield, which affects mortgage rates, hit 4.78% on Tuesday, the highest since January 2025. This sell-off, pushing a key bond yield gauge to its highest level since June 2008, could raise borrowing costs for millions of Americans, affecting home loans and other forms of borrowing.
While the Federal Reserve has indicated it may raise interest rates in September to combat inflation, bond yields are expected to stay high in the near term, according to analysts.
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