US Economy Defies High Borrowing Costs with Surging Demand

The U.S. economy is showing remarkable resilience to rising borrowing costs, with consumer spending, business activity, and artificial intelligence investment driving growth despite Treasury yields reaching levels not seen since before the financial crisis.

The benchmark 10-year Treasury yield touched 5.23% during Friday's session, its highest mark since June 2007, while the 30-year bond pushed past 5.51%, a threshold last crossed in 2004.

Business leaders, including Cleveland Federal Reserve President Beth Hammack and Philadelphia Federal Reserve President Anna Paulson, attribute the strength to consumer demand, stable employment, and the ongoing AI investment cycle.