The 10-year Treasury yield briefly rose to 5 percent on Monday, its highest level in three years, capping a long stretch of turmoil in the bond market that has pushed up borrowing costs for companies and consumers. Rates have reached levels that some worry could pose a risk to the economy. The rise in bond yields, which move in the opposite direction to prices, has been fueled by the effects of the war in the Middle East, worries that government spending is out of control and the explosion of spending — and borrowing — by artificial intelligence companies.

The Trump administration has tried to ease Treasury rates by intervening in financial markets, including by aggressively buying back billions of dollars of its bonds. But those efforts have failed to placate bond investors who on Monday pushed yields past 5 percent, as oil prices remained well above $100 a barrel, driving fears of higher inflation. The yield eased lower later in the day, falling to around 4.95 percent.

Last week, President Trump promised to pay $5,000 to every American if the Republicans kept control of Congress in the midterm elections, a proposal that could add $1 trillion to the federal deficit. The 10-year Treasury yield briefly surpassed 5 percent in October 2023. Before that, the yield had not risen that high since 2007, the year before the global financial crisis.

While the drivers of rising yields then and now are different, the effects are similar. A higher 10-year yield has contributed to rising mortgage rates, with the average 30-year fixed rate mortgage hitting 6.76 percent last week, up from around 6 percent in late February, on the eve of the start of the war in Iran. Rising rates could also threaten the stock market rally, analysts say, if investors rethink the risk-reward calculation of investing in stocks versus bonds.

Higher-yielding bonds offer investors a strong return with fewer risks than stocks. And higher rates can also squeeze corporate earnings, which underpin the stock market, by increasing borrowing costs for companies. The "greatest near-term concern for stocks," according to Antony Ghee, head of equity investments for the chief investment office at Merrill and Bank of America Private Bank, is "a sustained push above 5 percent" on the 10-year Treasury yield.

The Trump administration has singled out the 10-year yield as its benchmark for improving everyday affordability for Americans. But that measure has been moving against the White House's goals this year. The 10-year yield has risen roughly 0.8 percentage points this year and is more than a third of a percentage point higher than when President Trump returned to office in January 2025.

The rise in the 30-year yield has been even steeper, trading at multidecade highs for the past several weeks. The 30-year yield hovered around 5.33 percent on Monday. Amid the bond turmoil, Treasury Secretary Scott Bessent has intervened in financial markets in an effort to ease long-term rates.

Last week, the Treasury purchased $5.2 billion of its own debt maturing in the next 10 to 20 years, part of a plan to inject demand into the Treasury market to try to push prices higher and yields lower. But the Treasury's purchases fell short of the maximum $6 billion that it had said on Wednesday it could buy, despite receiving more than $10 billion in offers from investors, raising skepticism among some investors about how committed the Treasury was to its plan to reduce yields. Bond investors are now looking to Federal Reserve to take steps to control inflation.

Traders in futures markets now see a 90 percent probability that the Fed raises rates by a quarter of a percentage point at its meeting this week.