U.S. Treasury yields have surged to their highest levels since 2007, driven by persistent inflation and rising national debt. The 10-year yield increased to 4.687%, while the 30-year yield reached 5.2%. This spike comes as Kevin Warsh assumes the role of Federal Reserve Chair, inheriting a complex inflation landscape. The S&P 500 has declined for three consecutive days, reflecting market concerns. The rise in yields is attributed to several factors, including higher-than-expected inflation data, with wholesale prices up 6% year-over-year in April. Additionally, the U.S. debt trajectory is worsening, with the Congressional Budget Office projecting a $2.8 trillion increase in the federal deficit over the next decade due to the Big Beautiful Bill. Moody's recent downgrade of the U.S. credit rating further underscores fiscal challenges. Market analysts are closely watching the upcoming Federal Open Market Committee meeting on June 16-17, where Warsh's policy direction could significantly impact both bond and stock markets. The bond market's message is clear: the era of cheap government borrowing is over, raising questions about the stock market's ability to adapt to this new reality.