Treasury yields hitting 5% may not break markets now

BREAKING: The 10-year US Treasury yield hits its highest level since 2007, pushing borrowing costs deeper into territory that could strain the financial system's weakest links.

The 10-year Treasury yield just hit its highest level since 2007.

Five percent on the world's most important interest rate, and here's what caught my ear. The pros aren't panicking about today. Jack Ablin at Cresset put it plainly, five percent doesn't break anything on the day it arrives. It breaks things twelve to eighteen months out, when all that cheap debt has to be refinanced at the new rate.

Think about who borrowed at two or three percent during the zero-rate years. Companies, landlords, private equity. That debt now rolls over closer to six or eight. And housing feels it first. With mortgages heading toward eight percent, nobody sitting on a three percent loan is selling. So the market doesn't crash, it freezes. Homebuilders, brokers, title insurers, all stuck in the ice.

The maturity wall was moved, not removed. Somewhere out there, the clock on trillions in cheap debt is already running.

This is Liu Yang, reporting for HIT.