Breaking News
Get 40% Off 0
🔎 See NVDA's full ProTips for an instant risks or rewards Claim 40% OFF

Fed officials hint at stable interest rates amidst surge in long-term yields

Published Oct 09, 2023 03:25PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
USD/JPY
+0.02%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD/INR
-0.02%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
FHI
+0.86%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
FED
-0.23%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Federal Reserve officials Lorie Logan and Philip Jefferson hinted at a possible stabilization of interest rates on Monday, following the surge in long-term rates. This suggestion comes as the yield on the 10-year U.S. Treasury note has soared to a 16-year high of approximately 4.8%, pushing up borrowing costs across the board.

These heightened borrowing costs have been reflected in the national average 30-year mortgage rate, which has reached a 23-year high of 7.5%. Corporate bond yields have also seen an escalation, impacting business borrowing costs. These developments were discussed by both officials at a meeting of the National Association for Business Economics (NABE).

Logan, who is the president of the Federal Reserve Bank of Dallas, proposed that if these long-term rates remain high, there might be less need to raise the Fed's benchmark rate. Jefferson, vice chair of the Fed's board and an ally of Chair Jerome Powell, concurred with this viewpoint.

The Federal Reserve has been combating severe inflation by increasing its short-term rate from near zero to roughly 5.4% through 11 hikes since last year. This aggressive approach has sparked concerns about a potential recession.

Addressing NABE, Jefferson committed to considering these higher bond rates while assessing future policy decisions. Logan also emphasized that higher long-term bond rates could aid in achieving the central bank's inflation target of 2%.

The yield on the U.S. Treasury's 10-year note has been on a steady rise since July, hitting a peak not seen in over a decade and a half. This increase has inflated various borrowing costs, including that of mortgages and corporate bonds.

In conclusion, the surge in long-term yields might influence future Federal Reserve policy decisions, potentially leading to stable interest rates if these high yields persist.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Fed officials hint at stable interest rates amidst surge in long-term yields
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email