Impact of Rising Bond Yields on the Economy

Rising yields on U.S. government bonds are causing increased borrowing costs for both consumers and businesses, leading to broader economic implications. As Treasury yields approach 5%, the higher rates are affecting the interest paid on mortgages, car loans, and other loans, making them more expensive for everyday borrowers. This rise in borrowing costs is causing some potential homebuyers to delay their purchases, with many citing currently high mortgage rates despite the Federal Reserve's interest rate cuts. The connection between rising bond yields and economic activity suggests that sustained higher rates could eventually slow down consumer spending and investment.