Interest rates on 10-year US Treasury bonds crossed the 5% threshold yesterday for the first time since 2007, thus jumping to 5.001% in 16 years.
This increase, the fourth in a row in recent sessions, led to a rise in interest rates on 10-year US Treasury bonds by as much as 40 basis points in October alone.
Prices are now witnessing a radical change after the rise they witnessed the previous day, falling to 4.941%.
The jump in yields was caused by the words of Federal Reserve Chairman Jerome Powell, who said in his speech to the Economic Club of New York that he did not believe that the US central bank’s monetary policy had become too restrictive.
“Is policy too restrictive now? I would say no,” the US central bank chief said.
Powell also stressed that “inflation remains very high,” adding, “I and my colleagues are determined to return the inflation growth rate to 2% in a sustainable way.”
The last time the Fed raised interest rates was at the end of July, with the 11th monetary tightening since the start of 2022, which brought US federal funds rates between 5.25% and 5.50%.
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