Raising rates doesn't produce barrels. Why a Fed hike raises recession risk.

• The 10-year Treasury yield crossing 5% is a significant event, raising questions about Fed policy effectiveness and market reactions.
• Rising rates are directly impacting consumers through higher mortgage rates (approaching 7%) and credit card interest rates (around 19%), straining household budgets and potentially leading to reduced spending.
• There's concern that the Fed's rate hikes may not effectively combat inflation driven by supply shocks (like oil prices) and could increase recession risk, especially given existing consumer strain and the influence of fiscal policy and global market dynamics on yields.

The discussion centers on the 10-year Treasury yield crossing 5% and its implications for financial markets and the average American consumer. Analysts express concern about rising mortgage and credit card rates, the Fed's ability to tame inflation stemming from supply shocks, and the potential for increased recession risk. The interplay between fiscal policy, global markets, and investor demands on bond yields is also highlighted.