The interest rates on mortgages, credit cards and business loans have shot up in recent months, even as the Federal Reserve has left its key rate unchanged since July.
The focal point has been on the 10-year U.S. Treasury yield, which underpins many other borrowing costs.
The 10-year yield has risen a full percentage point in less than three months, briefly pushing above 5 percent for the first time since 2007.
Strong growth and stubborn inflationInitially, when the Fed first began to fight inflation, it was short-term market rates — like the yield on two-year notes — that rose sharply.
Those increases closely tracked the increases in the Fed’s overnight lending rate, which rose from near zero to above 5 percent in about 18 months.
Persons:
”, Subadra Rajappa, —
Organizations:
Federal Reserve, Treasury, Fed