Treasury yields are blowing up CBO forecasts, and experts who downplayed US debt fears are worried

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1. 1h ago

   Rising Treasury Yields Exceed CBO Forecasts

   Treasury yields are climbing, with the 10-year yield reaching its highest level since 2007. This surge has invalidated Congressional Budget Office forecasts and caused concern among experts who previously dismissed fears regarding US debt. While stock futures have risen and oil prices have fallen, the bond market remains volatile. Analysts suggest markets are reacting to reckless borrowing across the rich world, with some indicating the beaten-up bond market may be approaching escape velocity as yields move toward 5%.

   Why it matters

   Treasury yields reflect investor demand for government debt and influence borrowing costs across the economy. Sustained rises often signal inflation fears or concerns over government fiscal sustainability. The gap between CBO projections and actual yields suggests an underestimation of debt servicing costs.

   What is confirmed

   • The 10-year Treasury yield has hit its highest level since 2007.
   • Treasury yields are rising.

   Still unconfirmed

   • The 2-year yield hit its highest level since 2024.
   • The bond market may be nearing escape velocity.
   • Treasury yields are blowing up CBO forecasts.
   • Experts who downplayed US debt fears are now worried.

   What to watch next

   • CBO revisions to debt and interest forecasts
   • The 10-year Treasury yield reaching the 5% threshold
   Sources used for this update (9)

   1. Yahoo Finance — 10-year Treasury yield hits highest level since 2007
   2. CNBC — Beaten-up bond market may be nearing 'escape velocity.' Here's what that means
   3. The Economist — Soaring bond yields, gaping deficits and towering debts: what could go wrong?
   4. The Economist — Markets are waking up to the rich world’s reckless borrowing
   5. WSJ — Stock Futures Rise as Oil Extends Losses, Treasury Yields Rise
   6. CNBC — Treasury yields edge higher as volatile week wraps up
   7. Fortune — Treasury yields are blowing up CBO forecasts, and experts who downplayed US debt fears are worried
   8. WSJ — 2-Year Yield Hits Highest Level Since 2024
   9. WSJ — See the 10-Year Treasury Yield’s Wild Ride on the Road to 5%
   confidence 80%