Bond Market Sell-Off Threatens to Drive Up Loan Costs
· Business · CBS News, MarketWatch
A bond sell-off driven by investor fears over inflation and rising government debt has pushed the 30-year Treasury yield to 5.3%, its highest level since 2007. The 10-year Treasury yield, which directly influences mortgage rates, rose to 4.7% from 4.2% at the start of the year. Market sentiment reflects mounting government debt close to hitting $40 trillion, alongside geopolitical instability such as the end of a U.S.-Iran ceasefire that pushed oil prices higher. To stabilize the bond market, the Treasury Department announced it would double the size of its bond buybacks from $2 billion to at least $4 billion, focusing on longer-term maturities. Better-than-expected data on home sales and import prices further helped the market stabilize, though economic analysts predict Treasury yields will remain elevated.
Why it matters
Rising Treasury yields threaten to increase borrowing costs for everyday consumers purchasing homes or cars. The surge also signals growing investor concern over long-term government fiscal debt and borrowing capacity.
Read the original report — CBS News
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