The US Treasury bond market faces a big test this week, with market interest
rates on long-term government securities now at their highest level since
last spring. Last week set off alarms in the bond market because Treasury
yields broke out of the trading range they'd been in since mid- December.
The 10- year T-note yield jumped to 3.64% on Friday, up from 3.32% a week
earlier and the highest since May. The steep rebound in bond yields since
October has in large part reflected the economy's surprising strength. The
rising Treasury rates matter for more than just that market, they also
influence the mortgage rates. Interest rates are rising as some investors
bet that we're getting close to the point where the Federal Reserve will
begin to tighten credit.
As reported in the Los Angeles Times: Tom Petruno, February 7, 2011
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