Treasury Secretary's Remarks Highlight Rising U.S. Bond Yields and Mortgage Costs
Treasury Secretary Scott Bessent warned bond markets of tighter conditions, as Treasury yields hit multi-year highs, pushing mortgage rates above 7 percent and raising concerns for borrowers and corporations.
Treasury Secretary Scott Bessent told an audience at Southern Methodist University on September 8 that the Treasury was taking a more assertive stance toward the bond market. He said the department would act as the "house" in dealing with investors.
Since the speech, the 10-year Treasury yield has risen to its highest level since 2007, and the 30-year yield reached a peak not seen since 2004, according to market data cited by journalist Joseph Zeballos-Roig. The increase in yields has pushed the average 30-year mortgage rate above 7 percent, making it more expensive for consumers to obtain new loans or refinance existing mortgages.
"Higher yields can squeeze corporate borrowing and ultimately constrain profits," Zeballos-Roig wrote, noting that the bond market’s move higher also raises the cost of financing for the U.S. government.
Economists have warned that the tighter credit conditions could affect a range of loans, including mortgages, auto loans and corporate debt, with potential ripple effects for the broader economy.