Central Banks
Fed’s Bid to Avoid Recession Tested by Yields Nearing 20-Year Highs
- Long-term real rates have hit levels rarely seen in 20 years
- Policymakers haven’t taken chance to push back: ex-official
WATCH: Pimco's Clarida Says Fed Might Be Done With Hiking Rates
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The Federal Reserve may be putting its hoped-for soft landing of the economy at risk by tacitly accepting a run-up in long-term interest rates to the highest levels since 2007.
The surge — 10-year Treasury yields rose more than half a percentage point the past month to surpass 4.7% — heightens the danger in the near-term of a financial blowup akin to the regional bank breakdown in March. Longer run, it threatens to undercut the economy by markedly raising borrowing costs for consumers and companies.