Part 3/9:
In recent weeks, there has been a notable decline in the cost of long-term Treasuries, namely U.S. government bonds, which indicates a rise in yields—essentially the interest rates the U.S. must pay to borrow. For example, the yield on the 10-year Treasury rose from a low of 3.6% in September to a high of 4.8% earlier this month. Similarly, the yield on 30-year Treasuries climbed from just below 4% to just under 5%.
Despite a slight moderation in yields in recent days, the current rates are troubling as they represent the highest levels since the financial crisis of 2008. Interestingly, this increase in borrowing costs is occurring simultaneously with the Federal Reserve cutting interest rates, which traditionally should lower borrowing costs.