Long‑term government bond yields are sitting near their highest levels since the global financial crisis, and markets now treat these elevated ranges as the new normal rather than a temporary spike. Ten‑year US Treasuries have been trading around the mid‑4% range in 2026, with forward yields implying structurally higher rates for the coming decade, while Canadian and European benchmarks also sit well above 2010s averages. This reset in the risk‑free curve is reshaping the cost of capital for corporates, sponsors, and family offices. For dealmakers, higher bond yields flow directly into discount rates, leverage capacity, and return expectations on M&A. Debt coupons on sponsored loans that were 4-5% in the near‑zero‑rate era are now closer to 7-9% when refinanced, compressing free cash flow and, in weaker credits, forcing sales, recaps, or covenant fixes. Credit spreads in the middle market remain functional but cautious; lenders are tightening underwriting, reducing leverage multiples, and demanding clearer visibility on cash generation before supporting new deals. The result is a selective, disciplined market where stretch valuations are rare and equity cheques are larger. Strategic and financial buyers are responding by recalibrating hurdle rates, shortening payback expectations, and reserving scarce capital for high‑conviction transactions. In practice, that means more emphasis on resilient cash flows, reduced appetite for aggressive multiple expansion, and stronger focus on integration plans that protect margin and working capital in a higher‑for‑longer environment. For lower‑mid‑market founders and boards, understanding this new cost of capital is critical when setting valuation expectations, thinking about timing a sale, or considering partial liquidity events versus full exits.