US Borrowing Costs Soar to Fresh Highs Amid Inflation Fears
US borrowing costs hit fresh highs as fears over inflation push up oil prices. The effective interest rate on borrowing over 10 years rose to 4.79%, its highest level since January 2025, after oil prices surged above $92 a barrel.
The spike in borrowing costs affects the rates at which the US government can borrow money and influences mortgage rates for individuals. Michael Barr, a governor at the Federal Reserve, warned that inflation has been too high for five years and suggested raising interest rates if it doesn't cool down.
Latest figures show prices rose 3.4% in the year to July, above the Fed's 2% target, but interest rates have remained unchanged between 3.5% and 3.75%. Investors are monitoring comments from policymakers, with expectations of a rate hike this month growing due to inflation concerns.