NEW YORK — Normally quiet, the bond market can occasionally send warning signals loud enough to hit stock markets worldwide and even grab the attention of U.S. presidents and other world leaders.
Such rates have climbed with the 10-year Treasury yield since the Iran war began, and the average rate on a 30-year fixed mortgage is near its highest level in a year. But longer-term yields like the 10- and 30-year Treasury yields are set by investors in the bond market. For many U.S. households, that’s most easily seen through rates for mortgages . And recently, they have been demanding more in interest to make up for the growing risks of high inflation, continued government deficits and other factors.
And Fed Chair Kevin Warsh’s decision to signal little about the Fed’s next moves appeared to push longer-term Treasury yields higher amid questions about what the central bank will do to get inflation back to its 2% target. 28, when Warsh will give a speech at the Fed’s annual economic symposium in Jackson Hole, Wyoming. The Fed also appears more likely to raise its benchmark short-term rate than to cut it. At its last meeting in late July, three Fed policymakers voted to raise the fed funds rates even as nine voted to keep it unchanged. The government’s most recent inflation data suggest inflation may be slowing , leading many on Wall Street to forecast the Fed will keep the federal funds rates steady at its next meeting in September. The next big potentially market-moving event may come on Aug.
