26/08/2026
Why US bond yields just hit a 19-year high — and why it matters for your mortgage
Microsoft, Google, Amazon and Meta are all issuing enormous amounts of corporate debt to fund AI data centres — up to $1.5 trillion this year alone. That competes directly with US government bonds for the same buyers. Its this competition for capital and markets demanding a higher risk premium that is forcing longer dated yields higher.
When investors choose "Google bonds paying 7%" over "US Treasuries paying 5%," Treasury prices fall and yields rise. And US long-term yields set the floor for borrowing costs globally — including Australian mortgage rates, even when the RBA does nothing.
The US Treasury responded this week by doubling its bond buyback program, which pulled yields back down a little and then Scott Bessent suggested the Government could use the TGA to help fund further purchases, which also put downward pressure on yields. But the underlying pressure — deficits, AI debt issuance, an uncommitted Fed — hasn't gone anywhere.
Do you think higher yields could eventually break markets or do you see relief ahead?
