The 10-year Treasury yield surged past 5.1% this week, marking its largest single-day jump in over a year.
Investors are confronting a combination of rising government debt and persistent inflation pressures.
The Federal Reserve has signaled it will keep interest rates elevated for longer than markets previously expected.
Heavy Treasury issuance is adding strain, as the government funds widening deficits through new bond sales.
Demand has weakened at recent auctions, forcing yields higher to attract buyers.
Mortgage rates and corporate borrowing costs are climbing in response, tightening conditions across the economy.
Some analysts warn that the bond market’s volatility could spill into equities and other asset classes.
Others see the selloff as a correction after months of complacency about the path of interest rates.
The yield curve remains inverted, a signal that has historically preceded economic downturns.
For now, traders are watching upcoming inflation data and Fed commentary for signs of relief.
