A level of five percent as normal? Warnings of persistently high interest rates are increasing

2023-08-18 18:01:32

US Treasury Department in Washington

The USA is the largest provider on the capital market.

(Foto: Bloomberg/Getty Images)

Frankfurt After the significant increase in yields on US government bonds, there are more and more voices predicting a prolonged phase of high interest rates. Former US Treasury Secretary Larry Summers recently announced that 10-year government bonds would yield around 4.75 percent over the next decade. And now Bank of America is preparing its customers for an extended period of time with a five before the decimal point.

This is in stark contrast to the long phase between the outbreak of the financial crisis in 2008 and the global outbreak of the Covid pandemic in 2020. This period was characterized by low interest rates, low growth, low productivity and, above all, low inflation.

Ten-year US Treasuries are the benchmark in the global bond market. The yield is currently just under 4.3 percent and thus at the highest level for 15 years. In May, the bonds threw off less than 3.5 percent.

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