Yields on U.S. Treasury securities soared on May 19 after Moody’s downgraded the United States’s long-term credit rating.
Treasury yields were up across the board, with the benchmark 10-year yield firming above 4.52 percent.
The 20- and 30-year Treasury yields reached 5 percent for the first time since the middle of January.
Treasury yields and bond prices have an inverse relationship: Higher demand drives bond prices up and yields down, while lower demand results in falling prices and rising yields.
Long-term Treasury yields are crucial gauges for consumer borrowing costs, as loans for automobiles and homes track these interest rates.
Financial markets responded to Moody’s May 16 decision to lower the U.S. credit rating from Aaa—the highest possible score—to Aa1. Moody’s had been the only firm to maintain the United States’s high rating, and now it joins Fitch and Standard & Poor’s….