The bond market is making its nerves everyone else’s problem. The benchmark 10-year Treasury yield briefly crossed 5% on Monday, reaching its highest intraday level since 2007 as the bond selloff deepened. With oil near $109 and inflation still elevated, pressure on borrowing costs is only building.
- Higher 10-year rates can shrink mortgage borrowing power, lift auto-loan costs, and pressure companies refinancing debt or funding AI data centers.
- Traders see a 90% chance of a quarter-point Fed hike this week, while 30-year mortgage rates recently hit 6.76%.
Rate shock: The 10-year yield sits underneath a huge chunk of the economy, from mortgages and corporate debt to stock valuations and the government’s own borrowing costs. Wellington portfolio manager Brij Khurana called 5% “psychologically important” and backed a precautionary hike as the bond market grows more unsettled. That puts even more weight on this week’s Fed meeting, where a pause will test whether policymakers can calm the long end of the curve.