\n The weak bond market and rising yields are hurting Americans\u2019 borrowing power. Interest rates tied to the bond market, including mortgages and auto loans, continue to surge. The rate on a 30-year home loan topped 7% for the first time since early 2025 last week.\n <\/p>\n
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Explaining the bond market and how it could impact your wallet\n <\/p>\n
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Explaining the bond market and how it could impact your wallet<\/p>\n
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\n Meanwhile, investors keep heading for the bond market exits, selling off bonds and demanding higher rates at government bond auctions as inflation continues to rise. Higher prices degrade investments over time, and bondholders want to ensure they\u2019re compensated for the effects of higher gas and diesel prices on their investments.\n <\/p>\n
\n That\u2019s sending yields ever higher, breaking through barriers not seen in decades. The 10-year yield on Thursday hit 5.34%, its highest level since 2002. The 30-year Treasury yield also hit a 24-year high, rising as high as 5.69%.\n <\/p>\n
\n \u201cThere is carnage in the bond market,\u201d said Neil Wilson, strategist at investment bank Saxo. \u201cThe worry is that US growth is way stronger than expected.\u201d\n <\/p>\n
\n Treasury yields pulled back on Thursday: The 10-year yield ended the day at 5.24%, still its highest level since 2007.\n <\/p>\n
\n Analysts expect yields to remain elevated. US government data keeps showing evidence of a hot economy, maybe even an overheating economy.\n <\/p>\n
\n A stronger-than-expected report on gross domestic product<\/a>, the broadest measure of US economic activity, was released Wednesday, in addition to an inflation report <\/a>that showed prices rising well above the Fed\u2019s target. Some bondholders are sending yields higher in anticipation that the Fed will continue to raise its benchmark lending rate after increasing it last month for the first time since 2023<\/a>.\n <\/p>\n \n Unemployment is low \u2013 the September jobs report on Friday is expected to show the unemployment rate remained at 4.1%, a level economists call \u201cfull employment.\u201d Consumer spending remains robust, fueled by a strong stock market. And annual AI infrastructure spending is now measured in the trillions of dollars and is expected to keep growing \u2013 even as rates keep rising \u2013 over the course of the decade and beyond.\n <\/p>\n