U.S. Treasury Bonds rise above 5% for first time in 15 years

by ian

Investors are currently rattled after the 10-year U.S. Treasury yield hit its highest rate in 15 years.

The 10-year note shot above 5% during early trading Monday for the first time since 2007. That’s up by roughly 3.8% since the start of this year.

While a high return might sound like a good thing, it can actually raise borrowing costs for everyone. They set the floor on interest rates or everything from mortgages to small businesses to corporate debt.

In other words, it fuels fears of an economic slowdown where both businesses and consumers cut back on spending.

Fortunately, Treasury yields have retreated to 4.86%, which could give people in multiple sectors a reason for some calm.