Higher Treasury yields complicate Fed policy and debt financing amid a strong economy

U.S. Treasury yields neared multi-decade highs Thursday, with the 2-year at 4.87% and the 10-year at 5.12%, as strong purchasing managers data met new Federal Reserve rate hikes. The jump underscores stubborn inflation and rising debt costs pressuring the Trump administration and splits Fed Chair Kevin Warsh, who favors heeding markets, from Treasury Secretary Scott Bessent, who wants to counter market signals. Stronger growth, AI investment and real median household income rising 2.6% to $87,460 also drive higher borrowing costs.