US Treasury Yield Hits Highest Since 2007 Amid Fed Hawkishness
The US Treasury yield rose to 5.093%, its highest level since July 2007, as Federal Reserve officials signaled further interest rate hikes and market concerns grew over inflation.
Fed Governor Michael Barr stated that the Fed took an important step towards bringing down inflation by 'recalibrating' short-term borrowing costs, but monetary policy may still need adjustment in the future.
Barr noted that risks to achieving the 2% inflation target have increased, while risks to the labor market have mitigated. He stated that US economic growth is strong and the labor market remains solid, but inflation is above the Fed's target and has yet to show a clear downward trend.
The high-interest-rate environment is driving up housing finance costs, with the average 30-year fixed mortgage rate in the US rising to 7.12% last week, hitting a more than two-year high.