US borrowing costs hit fresh highs over inflation fears — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- US borrowing costs rose Tuesday, with the effective 10-year rate reaching 4.79%, its highest level since January 2025.
- Oil prices surged above $92 a barrel after renewed Middle East strikes intensified inflation concerns that contributed to the bond-market selloff.
- Federal Reserve policy remained between 3.5% and 3.75%, although July inflation of 3.4% exceeded its 2% target and increased speculation about a rate increase.
- Michael Barr warned that inflation had remained too high for five years and said the Fed should act decisively to raise rates if it does not cool.
- Kevin Warsh said policymakers would have more work to do if they were not confident that cost-of-living pressures were easing for Americans.
- US mortgage rates climbed to almost 6.7%, a one-year high, extending the higher borrowing costs faced by homebuyers and other consumers seeking mortgages, car loans or credit.
- Scott Bessent promised additional government debt buybacks after 30-year borrowing costs reached their highest level since 2007, but the market reaction was short-lived.
Why it matters: US homebuyers and other borrowers now face financing costs exemplified by 30-year mortgage rates near 6.7%. The federal government must also offer investors higher returns after its national debt passed $40tn, making the oil- and inflation-driven yield increase more consequential.
Ask SkimNews
