Andrew Keshner

Sat, May 31, 2025, 6:00 AM8 min read

People who need financing in order to buy a car or a home need to consider the price and their budget — and they may also want to keep an eye on the Treasury market.

Higher yields on Treasury debt are in sharp focus as lawmakers weigh how much they can add to the federal deficit with the Republicans’ massive tax and spending bill now under consideration in the Senate.

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Investors have been paying attention, with yields in recent weeks for the 10-year Treasury note BX:TMUBMUSD10Y and the 30-year bond BX:TMUBMUSD30Y hovering around their highest levels since 2007. Stocks have yet to give up on their recovery since their April 8 lows, but there’s still a risk that bigger tariffs in 2025 and higher bond yields will cut into corporate earnings and weigh on the economy.

People shopping for a car loan or a mortgage should also understand the implications of bond yields in the nearly $29 trillion Treasury market, given their link to consumer borrowing costs.

“The reason people ought to be paying attention is the cost for the lender is, broadly speaking, going up,” said Tim Quinlan, a managing director and senior economist at Wells Fargo WFC. “It’s not a unique opinion that the rising national debt and rising budget deficits just contribute to the interest-rate rise.”

When lenders determine the interest rates they charge on mortgages, car loans and other sorts of financing, they look at the specifics and also at the big picture. Lenders consider market strategies and the creditworthiness of would-be borrowers, Quinlan said. They also weigh their cost of capital, which is where Treasurys come in.

Lenders generally use yields in the Treasury market — particularly for the 10-year note — as a building block for rates on many consumer loans. The 30-year fixed-rate mortgage is the clearest example.

The 30-year rate on new mortgages currently averages 6.89% on a weekly basis, up from 6.76% at the start of the month, according to Freddie Mac FMCC. The yield on the 10-year note was 4.4% on Friday, up from 4.2% on May 1, according to FactSet.