The 10-year US Treasury yield hit 5.041% on September 15, a level not seen since July 2007, while the 30-year yield approached 5.3%, a two-decade high. This surge results from a combination of factors: inflation persistently above the Federal Reserve’s 2% target, oil prices spiking above $100 per barrel due to the Iran conflict, and federal deficits exceeding $2 trillion annually, representing approximately 6% of GDP. Hyperscalers in the tech sector are expected to issue around $250 billion in bonds in 2026, intensifying competition for the same capital pool the US government taps to finance its $40 trillion debt. Markets anticipate a 25 basis point interest rate hike from the Fed, which will make mortgages, consumer credit, and corporate borrowing even more expensive.
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