Rising Treasury yields become political threat for Trump before midterms

The 10-year Treasury yield has climbed above 4.8%, its highest level since October 2023, as a global bond selloff intensifies. This rise is pushing up borrowing costs for mortgages and auto loans, which could become a political liability for President Trump ahead of the midterms. Analysts note that sustained higher rates may quickly affect household finances and influence voter sentiment.

The bond selloff has unfolded gradually across major Western economies, with Brookings fellow Robin Brooks noting that only Switzerland and Sweden, which kept deficits low, have avoided the trend. The five-year Treasury yield has climbed from below 4% in March to nearly 4.6%, while the 10-year now sits above 4.8%, its highest level since October 2023.

Treasury Secretary Bessent has responded with buybacks and increased short-term borrowing, and has argued that AI productivity gains will prove disinflationary within six months. A Reuters poll found nearly half of registered voters rank the cost of living as their top voting factor, and 71% disapprove of Trump's handling of it. Political scientist Edward Tufte's framework frames midterms as a referendum on presidential performance.