LUBBOCK, Texas (RFD News) — Farmers and rural businesses face a tougher long-term borrowing environment as Treasury yields climb to their highest levels in more than two decades. The 10-year Treasury yield moved above 5.3% on October 1, while the 30-year yield reached about 5.6%, both at their highest levels since 2002.
Those market moves come as the Congressional Budget Office warns that persistently higher federal borrowing costs could significantly increase debt and reduce private investment. CBO modeled a scenario with interest rates eventually running 1 percentage point above its long-term baseline.
Under that scenario, debt held by the public would reach 222% of gross domestic product by 2056, compared with 175% under the baseline. Total federal deficits through 2036 would be about $1.5 trillion larger.
Higher benchmark rates can flow through to farm operating loans, land financing, machinery purchases and rural business borrowing. CBO also projects slower economic growth and less private investment under the higher-rate scenario.
Producers will be watching whether long-term yields remain elevated as they make 2027 financing and capital-investment decisions.
