Bond Market in Free Fall as Mortgage Rates Soar

The bond market is under intense pressure as mortgage rates have reached their highest level since 2023, rising by 150 basis points in just six months.

The 10-year Treasury yield has surged to 5.18% after gaining about 30 basis points in two days, its biggest one-day jump since April 9, 2025.

This significant increase is attributed to the ongoing conflict between the US and Israel, which pushed oil prices higher and brought inflation fears back into focus.

The Federal Reserve's decision to raise interest rates by 25 basis points has also contributed to the bond market's woes, with traders now pricing about 100 basis points of additional hikes by next summer.