Treasury yields exceeded 5%, far above the Congressional Budget Office's February forecasts of 4.1-4.4%, driven by a hot economy, rising geopolitical tensions, and competition for bond capital. Experts previously skeptical of debt concerns now warn that sustained elevated yields could push annual interest payments to $2.7 trillion by decade's end, potentially triggering a fiscal crisis.
The 10-year Treasury yield has exceeded 5%, far surpassing Congressional Budget Office forecasts of 4.1–4.4%, driven by a hot economy, geopolitical tensions, high deficits, and competition for capital. Previously skeptical economists including Ed Yardeni and Jared Bernstein now warn of escalating debt risks and potential fiscal crisis if yields remain elevated.
President Trump has proposed ending trade relations with 95 countries to generate $1.5 trillion annually and reduce the deficit, but economists warn this would trigger a severe recession and worsen fiscal problems. Trade analysts and economists across the political spectrum dismiss the claim as economically unfounded, since trade deficits do not translate to government revenue and are driven by private transactions between individuals and companies.
Mortgage rates are expected to fluctuate between 5.9% and 6.3% over the next five years, driven primarily by 10-year Treasury yields which economists forecast will rise gradually from current levels to around 4.3% by 2030. The forecast combines expert predictions from Deloitte, Goldman Sachs, and the Congressional Budget Office with AI analysis, accounting for the typical 1.9-2.0 percentage point spread between Treasury yields and mortgage rates.