10-year Treasury yield rises to highest level since 2007
10-year Treasury yield hits 5.23% as inflation and Fed hike bets rise Heavy bond supply and AI borrowing may keep bond yields elevated
The U.S. 10year Treasury yield climbed to 5.23% on Friday, its highest level since 2007, as investors reassessed the outlook for inflation and Federal Reserve policy. The move also reflected expectations that the Fed could keep rates higher for longer, with market pricing showing a growing chance of another hike in October.
While stubborn inflation helped push yields higher, the article says a bigger force this year has been heavy bond issuance. The federal government is financing a large deficit with new debt, while companies are also borrowing more to fund artificial intelligence infrastructure and datacenter expansion.
Analysts cited in the report said the increase in supply is adding pressure to the bond market. They also noted that strong investment activity and continued borrowing from major technology firms could keep yields elevated in the near term.