Treasury yields have been on the rise, with the 10-year U.S. yield touching 5% for the first time since 2007. That’s weighing on stocks, and creating uproar in the market. But there are more reasons why you should care about this.
There are a few reasons behind the rise of Treasury yields: For one, there’s the Federal Reserve’s stance that interest rates will likely stay higher for longer. Add to this persistent economic growth, high inflation, and a bunch of newly-issued government debt that’s weighing on prices. And when bond prices go down, yields go up.
Paying More Interest
For Americans, a higher 10-year Treasury yield may mean more expensive credit terms for things like car loans, credit cards, student debt, and mortgages. For example, the average 30-year fixed rate mortgage sits at its highest in more than two decades, nearing 8%.
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