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(NEW YORK) — U.S. Treasury yields soared in recent days as the Iran war stoked inflation fears, threatening to drive up borrowing costs for everything from mortgages to credit cards to auto loans.

The yields on 30-year bonds – the amount paid to a bondholder annually – touched their highest point since 2007. Ten-year Treasury yields peaked at about 4.69% on Tuesday, marking a roughly three-quarter percentage point jump from the start of the war on Feb. 28.

The yield on 10-year Treasuries retreated on Wednesday, registering at 4.58%. Still, yields exceed the level reached during a bond selloff in the aftermath of President Donald Trump’s “Liberation Day” tariffs in April 2025.

Since bonds pay a given investor a fixed amount each year, the specter of inflation risks higher consumer prices that would eat away at those annual payouts. In this case, a global oil shock has pushed up energy prices which in turn has trickled into other costs, such as groceries.

As a result, bonds have become less attractive. When demand falls, bond yields rise.

“It’s really all about the Iran war and its inflationary impact,” Ted Rossman, a senior industry analyst at Bankrate, told ABC News.

High bond yields make borrowing more expensive for average Americans because Treasury rates influence the rates offered by lenders.

Long-term Treasury yields help set interest payments for mortgages, credit cards, car loans and just about any other type of borrowing, Patrice Carrington, a professor of real estate at New York University, told ABC News.

The reason for the rise in borrowing costs is that regulated lenders are required to hold reserve assets, often made up in part by U.S. Treasuries, Carrington added. When Treasury yields rise, it raises the costs incurred by banks holding Treasuries on their books. Lenders, in turn, offset those added expenses with higher borrowing costs.

“The bank will pass along that higher cost of capital to any consumer loan,” Carrington said.

The onset of this pain for consumers is exemplified by the housing market, where the average interest rate for a 30-year fixed mortgage stands at 6.72% as of Monday, Mortgage News Daily data showed. Mortgage rates have climbed three-quarters of a percentage point from pre-war levels.

“That’s a really big jump,” Rossman said.

Each percentage-point rise in a mortgage rate can impose thousands or tens of thousands of dollars in additional costs each year, depending on the price of the house, according to Rocket Mortgage.

Credit card rates, by contrast, have remained flat over the course of the Iran war, though at heightened levels, Rossman said.

The average credit card interest rate stands at 19.57%, just slightly below where it stood before the war began, Bankrate data showed. At the start of 2026, futures markets expected the Fed to likely cut interest rates at least once by the end of the year, which would put downward pressure on credit card rates.

As the Fed weathers a renewed bout of inflation, however, markets estimate about a 50% chance of interest rates remaining unchanged over the course of the year and a 37% chance of a rate hike, according to the CME FedWatch Tool, a measure of market sentiment. Markets peg the odds of a rate cut this year at less than 2%.

As a result, credit card rates “are staying higher for longer” than many observers anticipated, Rossman said.

Analysts differed in their recommendations for consumers weighing whether to move forward now with securing a loan or wait for a potential decline in interest rates.

Liu Lu, a professor at the Wharton School at the University of Pennsylvania, said mortgage rates are unlikely to decline substantially in the near-term, meaning borrowers who can afford a loan at current rates may as well take the plunge.

“I wouldn’t bet on trying to catch the opportune moment,” Lu told ABC News.

Carrington, on the other hand, counseled patience for loan seekers.

Eventually, the economy will falter and the Fed will cut interest rates, pushing down borrowing costs, according to Carrington.

“We’re long overdue for a downturn,” Carrington said. “I absolutely think borrowers should wait.”

In the meantime, the impact of elevated bond yields on consumers isn’t entirely negative. The trend means better returns for investors who place their money into financial instruments such as money market funds or high-interest savings accounts, which are historically safer investments than the stock market.

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(NEW YORK) — The Social Security fund will run out of money in as little as six years, a shorter time frame than previously estimated, according to a report released earlier this month by the programs’ trustees.

News of the funding cliff prompted a pair of lawmakers to reach across the aisle and propose a rescue plan in an opinion piece last week for the New York Times.

Sen. Bernie Moreno, R-Ohio, and Sen. Elizabeth Warren, D-Mass., called for lifting a cap on the amount of annual income subject to the payroll tax that funds Social Security. Currently, the cap stands at $184,500.

In other words, the plan would require individuals making more than $184,500 per year to pay taxes on the entirety of their income, potentially generating trillions in additional funds for the program over the next 10 years.

The proposal could, in theory, help administrators avoid painful solutions for recipients, such as a reduction of Social Security payments.

Legislation reflecting the proposal has not been introduced. In the New York Times, Moreno and Warren said they are “working on legislation.” Spokespeople for Moreno and Warren declined to comment on the status of the measure.

Here’s what to know about a new bipartisan proposal for safeguarding Social Security:

Is Social Security in financial trouble?

Yes, the program faces an ever-tightening budget squeeze over the next handful of years, according to a report this month from the Social Security fund’s trustees.

The Social Security trust fund will run dry in 2032, unless Congress combines the program’s old-age and disability funds, in which case insolvency would arrive in 2034, the report found. A finding last year from the program’s trustees predicted Social Security would become insolvent in 2033 or 2034.

The program generates revenue through a payroll tax paid by employees and employers, setting the income apart from the overall federal budget. Since the early 2010s, however, Social Security has paid more in benefits than it takes in through taxes, shrinking the program’s available funds, according to a study issued by the Urban Institute earlier this year.

The budget shortfall has been exacerbated by a decline in births and a reduction of immigration, resulting in fewer taxpayers at the same time that many Baby Boomers have begun receiving benefits. The One Big Beautiful Bill also removed a tax on Social Security benefits, depleting another source of the program’s revenue.

What is the Social Security reform proposal from Warren and Moreno?

The bipartisan reform proposal would tweak the payroll tax that funds Social Security.

The program is funded by a 12.4% payroll tax, which is evenly split between employers and workers. The tax, however, applies only to a maximum of $184,500 in annual income, meaning any income beyond that amount remains tax free.

The proposal put forward by Warren and Moreno would lift the cap on taxable income, allowing the tax to apply to the entirety of a person’s income even if they make more than $184,500 per year.

“Since the vast majority of Americans make less than that, most people are paying Social Security taxes on 100 percent of their earnings while the highest earners are paying on only part of theirs,” Warren and Moreno said in a co-authored opinion piece in the New York Times.

The elimination of the cap on taxable income would generate about $3.4 trillion in added revenue over the next decade, according to an analysis from the non-partisan Peterson Institute. The policy change would close more than half of the program’s funding gap, the group said.

“With rising prices and artificial intelligence causing economic uncertainty for the future, Social Security must remain a stable foundation to help retirees afford life’s basic necessities,” Warren and Moreno said.

The proposal drew opposition from at least one conservative lawmaker. Sen. Jon Husted, R-Ohio, faulted the plan for what he described as a “giant tax increase.”

“We need to secure social security, we need to protect it, we need to make it stronger,” Husted told “The Guy Benson Show” last week. “But I’m not on board with the approach that they’ve outlined.”

What are some alternative reforms for funding Social Security?

As the program’s budget woes have deepened in recent years, elected officials and researchers have proposed a range of solutions. As with any financial shortfall, the fixes either increase revenue or slash expenses.

An alternate means of increasing tax revenue for the program involves ratcheting up the payroll tax by one percentage point from 12.4% to 13.4%, the Peterson Institute said. That move would generate $601 billion in additional revenue over 10 years, closing about a quarter of the program’s funding gap, the group added.

If Congress fails to address the projected budget shortfalls, automatic cuts will dial back Social Security benefits by about 25% in 2032, the Social Security fund’s trustees said earlier this month.

Earlier this month, a bipartisan bill introduced in the House proposed establishing an independent commission composed of 13 members appointed by leaders in Congress and the president. The commission would seek out fixes for the long-term sustainability of the program. The bill, which counts three cosponsors, has been appointed to two House committees for consideration.

As the years pass, the task of reforming Social Security becomes a greater and greater challenge, the Urban Institute said.

“Waiting only makes the changes larger and more difficult,” the group added.

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(NEW YORK) — Iranian attacks on significant energy infrastructure and refineries in several Gulf countries pushed oil and gas prices higher in volatile trading on Thursday.

Brent crude oil prices, a benchmark for global trading, climbed by about 6%, hitting $116 per barrel for contracts to purchase oil in May.

The benchmark for European gas also surged by about 15% after Iran on Wednesday released retaliatory strikes targeting energy sites in several Gulf countries.

An Iranian drone struck a Saudi Aramco refinery in Yanbu, on the Red Sea, on Thursday, according to the Saudi Ministry of Defense, which said the extent of the damage was being assessed. That refinery is a joint venture between Aramco and the U.S.-based Exxon Mobil Corp.

Kuwait also on Thursday said its Mina Al-Ahmadi Refinery, which is run by the state-owned National Petroleum Company, had been struck by a drone. There was a “limited” fire at the facility, according to the official Kuwait News Agency.

Qatari authorities said on Wednesday that Iranian ballistic missile attacks caused fires and “extensive damage” at the Ras Laffan terminal, which carries about one-fifth of the global supply of liquid natural gas. Qatar Energy, which runs the terminal, has said on March 2 that it would bring liquefied natural gas production at Ras Laffan to a halt.

Iran’s Islamic Revolutionary Guard Corps had issued warnings for several Gulf energy production sites, including the refinery in Yanbu, after Wednesday’s Israeli strikes on the South Pars Gas Field, the largest in Iran.

Those attacks added uncertainty to a market already on edge, as the overall conflict and the near-closure of the vital Strait of Hormuz by Iran has sent key energy prices higher.

The Dutch Title Transfer Facility, which is widely seen as the European benchmark for natural gas, saw forward-looking contracts for next month climb about 15% in midmorning trading on Thursday. Trading was volatile, and those contracts had registered intraday gains as high as about 30% in morning trading.

Since the conflict began on Feb. 28, with U.S. and Israeli strikes on Tehran, the TTF benchmark’s rate has about doubled. Intraday prices on Thursday hovered above about 60 euro per MWh, while those LNG contracts had traded below 30 euro per MWh between mid-November and mid-January.

Brent crude had been trading prior to the conflict near $70 a barrel. Prices has previously peaked at about $120 a barrel on March 9.

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