Treasury Yields Hit 5% for First Time in 16 Years, Foreshadowing New Era of Higher Rates

10-year Treasury yield hit 5% this week, a 16-year high, highlighting a new era of higher yields that are shredding confidence in predictions.

Factors pushing yields higher include a resilient economy, stubborn inflation, surging budget deficits requiring more bond issuance.

Some see yields nearing a peak but others say they could keep rising as high as 6% with impacts rippling across everything from credit cards to corporate loans.

Government spending is a key structural issue fueling higher yields long-term along with potential rating downgrades and changes in central bank policies.

Momentum trading is exacerbating the selloff but views differ on whether current yields make bonds a value or still overpriced.