The most important economic development of recent weeks is a surge in longer-term interest rates. It could portend a new environment in which more expensive borrowing costs are here to stay. Why it matters: Markets increasingly are priced for a world in which there will be no return to the cheap money era of the 2010s.

By the numbers: The yield on 10-year U.S. Treasuries was 4.35% as of this morning, the highest in 16 years. That rate was more than a full percentage point lower (3.29%) in early April.

• Other longer-term market rates have seen similarly dramatic rises, most notably home mortgages. The average 30-year fixed rate mortgage rate was 7.37% Friday, according to Mortgage News Daily, and looks poised to rise again today based on the morning's bond market action.
• That is a two-decade high, and could create a new wave of pain in the housing market.

Between the lines: The recent surge is particularly notable because it's during a time when the economic data has been mostly as expected and Fed officials have been quiet.

• That suggests it is driven by a shift in investors' long-term sentiment rather than the latest headlines.
• In particular, investors seem to be adjusting to the possibility the long-term neutral interest rate — the rate around which Fed policy hovers over coming years — is reverting to its pre-global financial crisis norm.
• That would make sense if a recent investment boom continues, budget deficits remain high, inflation pressures prove persistent and productivity growth accelerates in the way many artificial intelligence specialists expect.

There may also be technical factors at work. The Bank of Japan is backing away from its policies to suppress bond yields, so Japanese investors may be inclined to reallocate their investments away from U.S. Treasuries and toward domestic debt.

• China's economic distress and political tension with the United States may lead it to back away from Treasury bond purchases.
• On the supply side, the U.S. Treasury is enlarging its bond auctions to fund deficits.

The bottom line: The information contained in the surge in yields is "potentially important but less than clear-cut," write Krishna Guha and Marco Casiraghi of Evercore ISI in a note.

• But "it is clear that the move in yields — and its associated impact on mortgage rates, corporate debt, equities, the dollar and much else — represents a serious tightening of financial conditions."

Americans are seeking new jobs in smaller numbers and are less inclined to job-hop, according to a new Fed survey that points to a bit of weakening in workers' views of the labor market.

Why it matters: The survey results align with other economic data that shows a steadily cooling job market.

• That labor market is still solid, but some of the features that defined it last year — like rapid job switching — are fading.

By the numbers: The share of respondents who reported looking for a job in July fell to 19%, down from the 25% who reported the same last July, according to the New York Fed's survey of consumer expectations.

• That drop was most pronounced among those without a college degree, annual households with an income less than $60,000, and those younger than age 45.

The likelihood that respondents would switch to a new employer is also dropping: It was 10.6% in July, down 0.4 percentage points from the same period a year ago. Still, the rate of actual job-switching rose to 5.3% from 4.1% in July 2022.

• Meanwhile, the average expected likelihood of becoming unemployed in the coming months had the highest reading since March 2020 — nearly 4%, up from 2.3% in July 2022.

The intrigue: Signs of less-hot labor market conditions came alongside higher wage demands.

• The average expected annual salary of job offers in the next four months jumped to $67,416 from $60,310 in July 2022. Meanwhile, the average reservation wage reached $78,645, up from $72,873 last year.