Are Interest Rates on the Rise?

With inflation tame and credit demand low, a boost isn't imminent. Still, Greenspan wants to leave himself a little leeway

It certainly was a shocker. The Federal Reserve caught nearly everyone on Wall Street by surprise on Jan. 28 when it backed away from its promise to keep interest rates low "for a considerable period." Financial markets immediately took fright. Bond prices tanked, pushing the yield on the key 10-year Treasury note up to 4.19%, from 4.06%, just before the Fed's announcement. And stock prices nosedived, with the Dow Jones industrial average posting triple-digit losses.

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