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US 10-Year Treasury Yield Breaks 5 Percent Threshold

By Markets Desk · 2026-09-15 · 2 min read
A stack of paper currency and a calculator on a wooden desk
Illustration: Tradingbird

The 10-year US Treasury yield surpassed 5% for the first time since 2023. This move signals rising borrowing costs for consumers and firms. Markets are pricing in a 92% chance of a Fed rate hike this week. The spike is driven by oil prices and fiscal concerns.

The 10-year US Treasury yield exceeded 5% on Monday. This is the first time it has crossed this level since 2023. The rise marks a significant shift in fixed-income markets. Investors are reacting to inflationary pressures and fiscal risks. The market is currently pricing in a 92% probability that the Federal Reserve will raise rates by 25 basis points. This expectation is driving short-term yields higher.

Consumer borrowing costs have increased across multiple sectors. The average 30-year fixed mortgage rate reached 7.07%. This is the highest level since May of last year. Auto loan rates for new vehicles stand at 6.31%. This figure is 145 basis points higher than five years ago. Credit card interest rates also climbed to 23.8% in September. These increases are directly impacting household budgets and spending power.

Corporate borrowing costs surge

Businesses are facing higher expenses for capital. The effective yield on the ICE Bank of America US Corporate Index rose to 5.68%. This represents an increase of 95 basis points over the past year. High-yield corporate spreads have also widened. Firms with varying credit quality are paying more to fund operations. This trend is visible in both loan and bond markets.

Financial stress is leading to more insolvencies. Bankruptcy filings rose by 17% in the year ending June. The total count reached 608,511 cases. This is a 59% increase compared to the same period in 2022. Fitch reported a record private credit default rate of 6.3% in August. Healthcare companies led the default surge. These figures indicate broader economic strain.

Equity markets face pressure

Stock prices are declining amid the bond sell-off. The S&P 500 index is down 2% in the last month. The Nasdaq 100 index has fallen nearly 3%. The drop in equity values threatens the wealth effect. This effect links asset growth to consumer spending. A decline in property values could further suppress economic activity. Analysts warn that the robust US consumer may pull back. GN auto markets bonds reported that these shifts are being felt by investors and businesses alike.

Based on reporting by Business Insider, compiled by the Tradingbird desk.

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