The U.S. bond selloff that began with the war with Iran pushed the 10-year Treasury yield toward 5%, a level it has rarely sustained for almost two decades. The benchmark yield touched 4.8% on Friday and reached its highest level since October 2023 earlier in the week, raising financing costs for companies, consumers and dealmakers. Investors are weighing whether higher yields reflect resilient growth and strong capital demand from artificial-intelligence investment or mounting concern over widening fiscal deficits and U.S. government debt, which has passed $40 trillion. Nominal U.S. GDP growth rose from 6.07% year on year in the first quarter to 6.56% in the second, remaining above the 10-year yield for now, but analysts say the cushion is narrowing. The average long-term real rate on U.S. inflation-protected securities rose to 2.92% from 2.55% at the end of last year, and Gennadiy Goldberg of TD Securities USA said the increase in long-term Treasury yields was driven predominantly by real rates. Higher yields are also competing with equities, while historically tight investment-grade spreads offer limited protection if credit conditions deteriorate and higher funding costs could delay deals by months.