The worrying volatility of the US bond market

In recent days, the yield on 10-year Treasury bonds has reached and even topped 5%, the highest level since 2007. Since the FOMC meeting on 20 September, it has risen by more than 50bp. The Fed may take the view that the bond market is doing its work for it and hence has no need to raise its policy rates next week. This is the unanimous expectation. While the strength of consumption and employment are keeping inflationary risk alive, there are conversely concerns about financial ...