There is speculation that the Federal Reserve may remove their wording that interest rates will be held low for a long, long time, as Linda Ronstadt sang.
Sept. 15 (Bloomberg) — Treasury 10-year note yields touched the highest level in two months amid speculation the Federal Reserve will delete reference to interest rates staying low for a “considerable time” when it meets this week.
The difference between yields on two-year notes and 10-yea debt, the yield curve, reached the most since Aug. 1. There’s a 59 percent chance the central bank will increase its benchmark rate by July 2015, versus 51 percent at the end of August, federal fund futures show. A report today showed manufacturing in the New York region rose more than forecast in September.
“The market is braced for a hawkish Fed,” said Richard McGuire, a fixed-income strategist at Rabobank International in London. “This shift is in the price, so the hurdle for the Fed surprising the market is not insignificant.”
The yield on Treasury 10-year securities fell two basis points, or 0.02 percentage point, to 2.59 percent as of 8:46 a.m. New York time, according to Bloomberg Bond Trader data.
The yield touched 2.62 percent, the highest since July 7 after climbing 15 basis points last week, the biggest five-day increase since the period ended Aug. 16, 2013.
And the yield curve this morning flattened by almost 50 basis points at 30 years.
Perhaps Linda Ronstadt’s Silver Threads and Golden Needles would be more appropriate.
And here is Linda Ronstadt’s commentary on Fed policy creating a boom economy through fiat money.