Mortgage
Man Group strategist: 5.5% Treasury yields put AI spending and consumer credit at risk
By Real Estate Wire Staff, . Real Estate Wire.
Kristina Hooper, Chief Market Strategist at Man Group Plc, delivered a pointed warning on Monday: Treasury yields are rising so quickly, and from such an already-elevated base, that the two engines of US economic growth may not hold. National Mortgage News reported her comments, made during a Bloomberg Television interview as the bond selloff continued across the curve.
The 10-year Treasury yield has climbed more than 100 basis points this year and crossed 5.25% on Monday, according to National Mortgage News. The 30-year is approaching 5.6%. Hooper said the market "could easily get to 5.5% before year end."
For real estate, the most direct line runs through mortgage rates. Hooper described the 10-year yield as "so closely correlated" with mortgage rates and consumer credit, meaning that every basis point added at the long end feeds almost immediately into what borrowers pay. The US Bureau of Labor Statistics reported that owners equivalent rent was up 3.1% year on year as of August 2026, a measure that tracks the implied cost of homeownership rather than lease payments. With financing costs now rising sharply on top of that, the affordability pressure on prospective buyers and on leveraged property owners is compounding from two directions at once.
On the AI side, Hooper's argument is about return thresholds. Costlier debt raises the bar for what an AI investment must earn to justify itself, and she said that bar was already "quite high" before yields moved. If capital expenditure on AI infrastructure slows, the data center and industrial real estate sectors that have absorbed much of that spending face a demand question they have not had to answer in the current cycle.
Hooper pushed back on the explanation that rising yields simply reflect a strong economy. She attributed the Treasury selloff instead to inflation, concerns about fiscal sustainability, and the size of the US deficit relative to GDP. "What is abnormal is how dramatically fast yields have gone up on the long end," she said, as quoted by National Mortgage News. "Also what's a historical anomaly is how high our government debt load is."
She also introduced what she called a "P-shaped" economy, a variation on the more familiar K-shaped framing, built around the concentration of net worth at the upper end of the income scale. The stock market's run to record highs this year has generated a wealth effect that has helped sustain consumer spending, she said. That creates a secondary risk: if equities sell off, the spending that has been coming from wealthier households could pull back sharply, and that pullback would ripple into retail and residential markets.
National Mortgage News noted that Hooper's comments landed ahead of a week of economic data, including a Friday payrolls report that economists expected to show roughly 90,000 jobs added in September with unemployment holding at 4.1%. A stronger-than-expected number would add pressure on the Federal Reserve to continue raising rates, reinforcing the yield dynamic Hooper described.
What the reporting does not establish is how quickly AI sponsors or property investors would actually pull back if yields hold at current levels, or whether the Fed sees the same fiscal-sustainability dynamic Hooper does rather than a growth story. Those are the variables worth watching in the data due this week.