The Fed Raised Rates. Treasury Yields Kept Rising. Now What?

The Federal Reserve raised interest rates, yet Treasury yields continued climbing.

That creates an uncomfortable question for policymakers.

Are the Fed’s traditional tools still working the way they once did?

In Episode 308 of The Secret War on Cash, Dean Heskin and Chris Agelastos of Swiss America Trading examine the latest pressure in the Treasury market and what higher yields could mean for the broader economy.

Dean discusses reports that markets are pricing in a more aggressive path of future interest-rate increases as central banks respond to inflation and other economic pressures.

Chris focuses on the reaction following the Fed’s recent rate move.

Treasury yields did not decline significantly.

If anything, the market continued applying pressure.

That matters because higher rates and Treasury yields affect far more than Wall Street.

They influence mortgages, housing transactions, business borrowing and economic growth.

Chris notes that housing activity in the Phoenix area appears to have slowed, with homes remaining on the market longer as buyers confront elevated prices and financing costs.

Higher rates also create a serious problem for Washington.