2023-08-18 19:10:23
A trader attends the press conference of Jerome POwell, head of the FED. New York, July 26, 2023. BRENDAN MCDERMID/REUTERS
The cost at which the Treasury borrows over ten years in the markets in the United States had not been so high since 2007.
Washington Correspondent
Unheard of since 2007. The ten-year bond rate, from which the US Treasury borrows on the markets, reached 4.33% on Thursday, a level not seen in sixteen years.
The good news from the US economy is hard to digest for the bond market. The rosy scenario, in which investors have believed since the beginning of the year, is suddenly called into question. They seem to be discovering that the easing of inflation, which has been evident for a year, is pausing. The market’s immediate reaction is to drive up bond yields sharply, ie the price demanded by investors to lend their cash.
Three immediate factors explain this concern. First of all, the American employment market remains very tense, the shortage of labor is not reduced as we had hoped. The unemployment rate fell back to a full employment level of 3.5% in July. The number of unfilled vacancies is still abnormally…
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#Inflation #resilience #interest #rates #soar