Government debt costs leaped higher on Wednesday, driven by factors including a report showing increased inflation pressures, surging expectations for an October Fed rate hike, and weak demand at a 5-year note auction. The 10-year Treasury note's yield reached 5.125%, a level not seen since before the global financial crisis, while the 2-year note climbed over 13 basis points past 4.9%. Allianz Trade North America senior economist Dan North noted that while savers might see slightly higher rates, the surge in yields primarily impacts housing and personal consumer loans, making borrowing more expensive for consumers who drive nearly 70% of the U.S. economy. Mortgage rates are now at 7.26%, up significantly in recent weeks.