The 10-year US Treasury yield hit 5.23 percent on Friday, its highest since 2007, and the 30-year rate reached 5.49 percent, the highest since 2004. The article attributes higher rates to four forces: the conflict with Iran pushing up oil and inflation, AI data center spending estimated at $1.37 trillion this year and largely borrowed, tariffs adding about half a point to inflation, and a shrinking workforce as net immigration slowed. The federal deficit of about $2 trillion a year means more government borrowing. The extra yield on high-yield corporate bonds over government debt is 2.8 percentage points, below its ten-year average, but higher base rates mean buyers pay more to borrow and expect less when they sell. Markets put roughly a two-in-three chance on the Fed raising rates again on October 27 and 28.
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