US borrowing costs rise as attempts to ease rates prove short-lived

Long-term borrowing costs in the US rose again despite an announcement from the government that it would intervene to try to lower them.

Earlier this week, the Treasury Department said it would buy back more debt in a bid to lower rates being charged by investors on global bond markets, which governments and major corporations rely on to borrow money.

While rates - or yields as they are called - eased on borrowing over 30 years following the intervention, they have since risen again. Such moves can affect mortgage rates and car loans.

Economists said the surprise move by the US government had proved short-lived, with ongoing concerns over the level of borrowing as national debt passed $40tn.

On Friday, the interest rate on 30-year bonds had risen to around 5.27%.

Governments and corporations sell bonds - essentially an IOU - to raise money for spending, and in return they pay interest. Interest rates on bonds are known as yields.

Bond investors typically demand higher returns - or yields - if inflation is high or they expect it to be elevated in the future.

Yields had fallen sharply earlier this week to 5.18% from an almost two-decade high of 5.34% following the Treasury Department announcing its "support".