The renewed rise extends pressure on borrowers, with mortgage rates above 7% and companies overhauling borrowing plans as the Treasury selloff raises financing costs. The federal deficit remains near 6% of GDP. Pimco President Christian Stracke has identified demand for capital from large cloud companies and the AI ecosystem, rather than inflation expectations, as the primary force pushing real rates and bond yields higher.
Bessent’s assurances on the deficit have met skepticism from market strategists pointing to the scale of US borrowing. He has described rising yields as a global trend rather than a shift away from US debt. “I can’t control the bond market. What I can do is get people to slow down and think,” he said in an Axios interview published Saturday.