U.S. bond yields are surging, putting pressure on the housing market, stocks, gold and cryptocurrencies at the same time. Cryptopolitan, a blockchain media outlet, reported on Thursday that the 10-year U.S. Treasury yield rose as high as 5.18 percent intraday, the highest level since 2007. The average rate on a 30-year mortgage jumped to 7.45 percent.

The 10-year Treasury yield rose about 30 basis points over two days. The one-day rise was the biggest since April 9, 2025. The yield was 3.97 percent before U.S. and Israeli strikes on Iran, but it has climbed faster since then as oil prices rose and inflation concerns widened.

Brent crude rose back above $105 a barrel and diesel prices hit a record high. The burden of energy prices also grew as the move coincided with a period when global diesel demand increases by 2,000,000 barrels a day. U.S. consumers' annual expected inflation was 4.6 percent, the third-highest level over the past year.

Expectations for Federal Reserve policy have also changed. Markets saw the possibility of further rate hikes as low because Donald Trump wanted low rates and appointed Kevin Warsh as the new Fed chair. But the policy rate was raised by 25 basis points eight days ago, with all policymakers voting in favour. The Fed said at the time, "The Committee will achieve price stability."

Markets are pricing in about 100 basis points of additional rate hikes through next summer. The bond market shifted last week toward the view that a 50 basis point increase was needed rather than 25 basis points, and selling continued despite U.S. Treasury efforts to stabilise the market.

The shock from the surge in yields spread to other assets. Long-term mortgage rates rose above 7 percent for the first time since early 2025, increasing monthly repayment burdens for homebuyers. U.S. stocks neared record levels early this week, but gains slowed as Treasury yields climbed. Gold and cryptocurrencies were also affected by higher Treasury yields.

Digital assets such as bitcoin do not provide fixed income. With the 10-year Treasury rising to around 5.18 percent, the standard for allocating funds between safe debt assets and volatile assets is also changing. Supply pressure also increased as the U.S. government continues large-scale Treasury issuance to cover its fiscal deficit. If demand cannot absorb the supply at current prices, bond prices fall and yields rise.