Peter Schiff says bond yields could surpass 8% as risk of government default rises: 'No one is talking about ... the real story'

For now, bonds haven’t broken through to those eye-watering levels. On October 9, the 10-year Treasury was trading at 5.25%, a drop of six basis points from its peak during the week. The 30-year Treasury hovered around 5.61%, just five basis points below its highest level since 2002. The brief reprieve doesn’t mean the bond market turmoil is over.

Another prominent analyst raises the alarm

The U.S. has experienced an unstable period in bond markets, as investors grow queasy with lingering inflation due to the war in Iran and a growing national debt. Some analysts have also blamed the borrowing spree among AI companies for pushing yields higher. Yields move inversely to prices, so inflation erodes a bond’s value.

Other prominent financial analysts believe bonds have space to keep climbing in the coming weeks.

“It is certainly possible, even from a short-term trading perspective, given that some of the activity we’ve seen in the last couple of weeks is tied to some negative technicals, some stop-out activity from the platform hedge funds and other levered investors. You can certainly get there,” Dan Ivascyn, chief investment officer at Pimco bond trading firm, told the Financial Times in an interview published Friday.

Pimco believes it’s possible for yields to reach 6% — the first time to do so since 2000.

These rising yields will affect Americans in the form of higher borrowing costs, since they affect lending rates for mortgages, vehicles and more. The Trump administration has shrugged off the bond market unrest by citing the spread of the sell-off to other developed economies like Germany, Japan and France.