Source: Golden Ten Data

Interest rate hikes indicate that American consumers will face more pain, andThere are signs that the effects of the recent surge in US Treasury yields are beginning to be felt.

US Treasury yields have risen sharply over the past month as investors worry that the Fed will raise long-term interest rates. This pushed 10-year US Treasury yields above 5% on Monday, reaching their highest level since 2007.

Higher bond yields are particularly troublesome for consumers, because this will affect the rise in borrowing costs across the economy.

There are signs that this may have begun to put pressure on Americans.As their savings dwindled, their financial situation seemed more unstable.

As can be seen from the following four charts, Americans are already feeling the pain caused by soaring bond yields.

First, interest rates on mortgages are over 8%.

According to “Mortgage News Daily” estimates, interest rates on 30-year fixed mortgages have recently climbed to more than 8%. That means one of America's most popular mortgages has soared to its highest level in 23 years.

Second, interest rates on personal loans are rising.

According to data from the Federal Reserve, the interest rate on 24-month personal loans at commercial banks reached 12.17%, which is the highest borrowing cost for personal loans since 2007.

Third, interest rates on credit card debt are rising.

In August of this year, commercial bank credit card interest rates soared to 21.19%, according to data from the Federal Reserve. Another Bankrate analysis showed that the average interest rate for retail cards was around 28.93%, a record high.

Fourthly, the delinquency rate is rising and is likely to rise further.

For consumers struggling to pay the rising cost of interest on debt, overdue payments are increasing.The credit card delinquency rate for the second quarter reached its highest level since 2012. Meanwhile, consumer loan delinquency rates have reached their highest level since the pandemic.

Given the growing size of unsecured consumer debt, this trend is likely to get worse, since such debt is generally not financed at a fixed interest rate.

According to data from the New York Federal Reserve,Unsecured loan debt rose to $4.71 trillion in the second quarter, of which $1.03 trillion was credit card debt, a record highAnother $1.58 trillion was in auto loans.

At the same time, there is about $1.57 trillion in student loan debt. According to a recent survey by Morgan Stanley, borrowers' repayments have only just recovered since the beginning of October, but34% of borrowers say they can't repay at all.

As the backbone of the US economy, consumers are under increasing pressure, which may be a precursor to a recession. Last week, Charles Schwab Financial Analyst Jeffrey Kleintop (Jeffrey Kleintop) warned that since consumers and small businesses are under pressure from soaring interest rates and rising inflation,The US is slipping into a “cardboard recession”.

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