U.S. companies issued less than $70 billion in new bonds in October, making it the slowest month this year for new issues and the weakest October since 2011, the Financial Times reported.

The 50 sales concluded this month reflect the smallest monthly total in more than 20 years, data from LSEG shows.

Last week, the yield on the 10-year treasury bond surpassed 5 percent for the first time since 2007. 

Yields on U.S. treasury bonds benchmark the interest rate businesses will have to pay on their bonds to attract buyers.

On 26 October, the average yield on U.S. investment-grade corporate bonds rose to 6.3 percent, compared to 4 percent three months earlier. Junk bond yields have climbed from 8.4 percent to 9.4 percent over the same period.

“Anyone who was thinking about coming into this market is taking a step back,” Richard Zogheb, bond chief at Bank of America, told the FT. Companies are saying, “‘We’ve had such a dramatic move in such a short period of time, I’d like to watch a little and make sure it’s here to stay’,” he added.

For many corporations, the rate is simply too expensive in a time of economic uncertainty, investment bankers told the FT.

TREND FORECAST: Bond yields will remain high through the rest of this year and into 2024, curbing corporate borrowing.

Fewer business loans will mean a more sluggish economy, slow hiring, and eventually will cut consumer spending, pushing the economy closer to—or deeper into—recession.