AI boom behind 20% of US bond yield surge: What’s driving the rise?

Bond yields continue to climb, and the AI boom is getting part of the blame. The 10-year US Treasury yield climbed as high as 5.34%, its highest since 2002, while the 30-year yield spiked to a 24-year high of 5.69%.

First, a quick refresher. Bond yields move opposite to bond prices. So when investors sell bonds, prices fall and yields rise. A rise in yields also brings in the expectation of a higher-rate scenario. That is not good news. It is not looked upon favourably for the economy, corporates and borrowers. Why? Higher rates make loans costlier and squeeze growth.