Here’s what that means for you

Dow futures fall 200 points on Monday as the 10-year Treasury yield tops 5%

The return of the benchmark 10-year Treasury Department On Monday, it again crossed the 5 percent mark, a key level that could impact mortgage rates, student debt, auto loans and more.

Last week, the 10-year yield crossed the 5 percent threshold for the first time in 16 years after Federal Reserve Chairman Jerome Powell said “inflation is still too high,” raising expectations that another interest rate hike this year may not be completely off the table.

“This has real implications for the economy and ultimately affects every individual in the U.S.,” said Mark Hamrick, senior economic analyst at

Stock futures fell on Monday as yields rose and investors assessed the prospect of longer-term higher interest rates from the Fed.

The 10-year bond yield is a barometer for mortgage rates and other types of loans.

“If the 10-year yield goes up, it will have a domino effect on almost everything,” said Brett House, an economics professor at Columbia Business School.

Even though many of these consumer loans are fixed, anyone who takes out a new loan will likely pay more interest, he said.

Why Treasury yields have risen

The yield on a bond is the total annual return that investors receive from bond payments. According to economists, there are many factors responsible for the recent rise in Treasury yields.

For one thing, yields tend to rise and fall depending on the Fed’s interest rate policy and investors’ inflation expectations.

In this case, the central bank has been aggressively raising its key interest rate since the beginning of 2022 to contain historically high inflation and drive up bond yields. Inflation has has fallen significantly since then. However, Fed officials and recent strong U.S. economic data suggest interest rates will likely need to stay higher for longer than expected to finish the job. Increased oil prices have also fueled inflation fears.

Mortgage rates will remain high

The greatest burden most Americans face lies with themselves Home mortgage. Currently the average interest rate is 30 years fixed up to 8%said Freddie Mac.

“For those planning to buy a home, this is really bad news,” said Eugenio Aleman, chief economist at Raymond James.

“Mortgage rates will likely continue to rise and that will push affordability further into the distance.”

Student loans could become more expensive

Car loans are becoming more expensive

Savers can benefit

A typical household of the generation

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