Fed's Kaplan: Rising Bond Yields Send Pessimistic Signals About US Growth
The growing conviction that the Fed will raise rates in December has led a 10-year Treasury bond yields to a 7-year high. The US 10-year Treasury note, which serves as a benchmark for a wide range of lending activities, rose 2.4 basis points to 3.254%, pushing above the 3.25% threshold for the first time since late April 2011. 30-year treasury bonds climbed to 3.44%, a four-year high.
Robert Kaplan (Federal Reserve Bank of Dallas President) stated, that the compression in bond market yields is a signal that investors are worried about long-term growth. According to Kaplan, the bond market is sending a pessimistic signal about the longer-term prospects of the US economy and prospects for future growth are somewhat sluggish or uncertain.