Ross Gerber Warns US 'Can't Afford' 5% Treasury Yields As Bond Rout Sends Mortgage Rates To 2023 High

The bond market ‘meltdown’ is accelerating, pushing mortgage rates to their highest level since 2023, with investor Ross Gerber warning that the U.S. “can’t afford” sustained 5% Treasury yields without risking a debt spiral. Rates Have Jumped 150 Basis Points In Six Months The average interest rate on a 30-year mortgage in the U.S. has climbed to 7.45%, up 150 basis points in six months, and the highest level since 2023, when inflation was above 6.4%, according to The Kobeissi Letter. The real turning point, the market commentator argued, came last week with the Fed’s unanimous rate hike, a signal that markets are now taking Federal Reserve Chair Kevin Warsh “more seriously” after months of doubting he’d raise rates at all. The Fed raised its benchmark rate by 25 basis points, its first hike since 2023. The 10-year Treasury yield stood at 5.167% and the 30-year yield at 5.463% at the time of writing. It's official.As the bond market "meltdown" accelerates, the average interest rate on a 30Y mortgage in the US is up to 7.45%.That's up +150 basis points in 6 months and the highest since 2023, when inflation was at 6.4%+.What is happening? Let us explain.(a thread) pic.twitter.com/xAWnxSbifp— The Kobeissi Letter (@KobeissiLetter) September 24, 2026 Read Also: Elon Musk Says SpaceX Could Have GPT-6-Level AI in 3 Months, Reach ‘Pole Position’ Within 6; SpaceXAI Plans Massive GPU Expansion Inflation Is the Major Driver U.S. consumers now expecting inflation to reach roughly 4.6% over the next year, the third-highest reading in the past 12 months, according to the market commentator. The surge comes amid the war in Iran’s disruption to global supply, and peak seasonal diesel demand, with global consumption rising by 2 million barrels a day during this period and truckers now paying more than 100% more for fuel than they were nine months ago, a backdrop Kobeissi said makes 4% inflation look low by comparison. At the time of writing, Brent Crude was down 0.35% at $106.23 a barrel, while WTI futures was trading at $93.57 a barrel, 1.1% lower, according to Investing.com. August inflation held at 3.4% year-over-year, while gasoline prices rose 3.9% in the month and accounted for more than one-third of the monthly CPI increase. U.S. ‘Can’t Afford’ a 5% Treasury “Rates continue to rise as there are plenty of places to put capital better than a government bond,” Gerber said in a post on X. Bondholders have taken a significant hit over the past year, Gerber said, arguing higher rates will either rein in reckless behavior or trigger a crisis. “America can’t afford a 5% treasury bond for long without creating a debt spiral,” he added. Rates continue to rise as there are plenty of places to put capital better than a government bond. Owners of bonds have lost a ton in the last year. Higher rates curb the bad behavior or create a crisis. America can’t afford a 5% treasury bond for long without creating a debt…— Ross Gerber (@GerberKawasaki) September 24, 2026 Price Action: The iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF) closed 0.55% lower on Thursday at $89.69 and gained 0.14% in after hours, while iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) lost 0.98% to close at $79.42 and rose 0.13% in extended trading. The iShares 7-10 Year Treasury Bond ETF has a Momentum score in the 23rd percentile, according to Benzinga edge rankings. See More: Top Momentum Stocks Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Shutterstock