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Powell Goes Easy on Surging Yields While Central Bank Peers Fret

  • 10-year Treasury yields up more than 40 basis points this year
  • Higher U.S. yields are pulling up global bond rates with them
Because government borrowing costs are used as the benchmark for pricing loans to businesses and consumers, any increase in yields trickles through to the real economy.

Because government borrowing costs are used as the benchmark for pricing loans to businesses and consumers, any increase in yields trickles through to the real economy.

Photographer: Mikael Sjoberg/Bloomberg
Updated on

The unprecedented $9 trillion rescue mission by central banks to haul the world economy from its coronavirus recession is being tested as rising bond yields and inflation bets threaten their ability to keep borrowing costs down.

While Federal Reserve Chairman Jerome Powell this week called the recent run-up in bond yields “a statement of confidence” in the economic outlook, other counterparts are sounding less sanguine as their recoveries lag that of the U.S..