Bond Yields Reach Two-Decade Highs, Affecting Borrowing and Savings

Bond yields have risen to their highest levels in roughly two decades. The bond market functions as the venue where governments and large companies sell IOUs to investors, promising repayment with a set interest rate. When worries about inflation rise, bonds may become less attractive to buyers.

Higher yields affect anyone who borrows money, including businesses seeking capital for projects like building data centers. For savers, the higher yields mean they can earn more interest by investing in bonds or high-yield savings accounts. Furthermore, higher yields could increase interest payments for the federal government, potentially leaving less money for other spending.