U.S. Treasury yields surged this week, with the 2-year yield reaching 4.87% and the 10-year yield climbing to 5.12%, levels exceptionally high by recent standards. This jump reflects a strong economy, persistent inflation, and the rising cost of national debt, as the federal deficit is projected to exceed 6% of gross domestic product this year. Real median household income rose 2.6% to $87,460, while the poverty rate declined to 10.2%. The Federal Reserve, chaired by Kevin Warsh, raised short-term interest rates to curb inflation, creating tension with Treasury Secretary Scott Bessent, who prefers to intervene directly in markets when he believes prices have deviated from equilibrium.
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