Brian Chappatta, Columnist

The Fed Already Has a Cap on Long-Term Bond Yields

The central bank’s projected neutral interest rate is 2.5%, and it’s probably not going up soon.

March 8, 2021 at 11:30 AM UTC

Brian Chappatta is managing editor of Bloomberg News' leveraged finance and distressed debt teams. He was previously managing editor and team leader of its wealth group. Before that he was a Bloomberg Opinion markets and finance columnist and a bonds reporter for Bloomberg News.

Don’t fight the dots.
Photographer: Hannah Peters/Getty Images

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Last week was something of a watershed moment in the $21 trillion U.S. Treasury market. After a period of relentless selling that pushed longer-term yields to their highest levels in a year, Federal Reserve Chair Jerome Powell had one last opportunity to quell investors’ nerves before the central bank’s self-imposed blackout period.

Instead, he said that he’s not too bothered by the moves and that traders are on their own. Mic drop.