Year Treasury yield hits 5%, critical threshold for US economy and markets

The 10-year U.S. Treasury yield climbed to 5% on Monday, a level briefly seen in 2023 and not otherwise reached since 2007. The move can translate into higher borrowing costs for households and businesses, as the benchmark influences interest rates across the economy. The surge extends a sell-off in government bonds, now part of a wider reassessment driven by factors including high energy prices, expectations that central banks may keep rates higher, uncertainty tied to the war with Iran, and concerns around government spending and mounting debt. With yields rising when bond prices fall, the year-to-date pressure has pushed borrowing costs toward multi-decade highs, including mortgage rates.