The Yield On A 10-Year Treasury Reaches 5% For 1st Time Since 2007. Here’s Why That Matters

FILE - A trader stands outside the New York Stock Exchange, Friday, Sept. 23, 2022, in New York. (AP Photo/Mary Altaffer)

NEW YORK (AP) — The yield on the 10-year Treasury has reached 5% for the first time since 2007.

That matters for everyone, not just Wall Street.

Treasury yields have been climbing rapidly, with the 10-year yield rallying from less than 3.50% during the spring and from just 0.50% early in the pandemic.

The jump means the U.S. government must pay more to borrow money from investors to cover its spending.

It also directly affects people around the world, because the 10-year Treasury yield is the centerpiece of the global financial system and helps set prices for all kinds of other loans and investments.