Soaring Treasury yields aren't just bad for the government and its $40 trillion debt. They also threaten to raise borrowing costs, hitting everyone from homeowners to credit card users, while providing limited relief to consumers and potential benefits to banks.

Government debt costs leaped higher Wednesday, the product of multiple factors including a fresh report showing higher inflation pressures, surging expectations for a Federal Reserve rate hike in October, and an auction for 5-year notes showing that Treasury demand was weak. Competition from hyperscaler debt issuance also is seen as an aggravating factor.