Fed Officials Say Spike In Bond Yields May Leave Rates Unchanged

Two Federal Reserve officials stated on Monday that the central bank might decide to keep interest rates unchanged at its next meeting.

Since late July, the yield, or interest rate, on the 10-year US Treasury note has risen from approximately 4% to about 4.8%, marking a 16-year high.

They believe that a surge in long-term interest rates has made borrowing more costly and could potentially help in tempering inflation without requiring any action by the Fed, Christopher Rugaber reported for the Associated Press (AP).

Since late July, the yield, or interest rate, on the 10-year US Treasury note has risen from approximately 4% to about 4.8%, marking a 16-year high.

This increase in yields has led to higher borrowing costs, pushing the national average 30-year mortgage rate to 7.5%, as reported by Freddie Mac, marking a 23-year high. Additionally, business borrowing costs have risen as corporate bond yields have also climbed.

Philip Jefferson, who serves as the Vice Chair of the Fed's board and is a close ally of Chair Jerome Powell, mentioned in a speech to the National Association for Business Economics on Monday that he would "remain cognizant" of the elevated bond rates and factor this into his consideration of future policy decisions.

Following Jefferson's remarks, US stock prices reversed their earlier losses, and the S&P 500 saw a 0.5% gain in late trading.

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