Why interest rates could stay high for a decade or more
If markets are right, a new era is beginning and the consequences will be far reaching for households, companies and governments around the world.
Not long ago, as interest rates in the rich world hovered near zero, economists debated whether their downward march was the product of a decades-, centuries- or millennia-long trend. Now the burning question is how long they will stay high.
On October 18, the 10-year Treasury yield, which incorporates long-term expectations for interest rates and was below 1 per cent as recently as 2021, hit 4.9 per cent, its highest since 2007. The 30-year Treasury yield crossed 5 per cent the same day.
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