US 10-year Treasury yield tops 5% 1st time since 2007
The 10-year US Treasury yield just topped 5% for the first time since 2007.
This jump is tied to a mix of stubborn inflation (thanks to the pandemic and global tensions) and the government selling loads of bonds to cover its big spending.
The last time yields were this high was in 2007, before the Federal Reserve began slashing interest rates in response to early signs of what would become the global financial crisis.
Fed rate hikes boost borrowing costs
The Fed has been hiking interest rates to fight inflation, which made older, low-yield bonds less attractive.
Despite worries about a recession, strong consumer spending and tech investments have kept the economy afloat.
Plus, recent events (like rising oil prices from tensions with Iran and more government bond sales) have pushed borrowing costs higher for everyone, from homebuyers to businesses.