Sometimes we get into the Forest so deep we can not even see the Trees …..
Late last week, a really sharp friend asked a surprising question:
“What makes interest rates move, specifically the 10 Year Treasury ?“
Inflation and Growth Expectations, Credit Worthiness
This is 5 years of the 10 Year US Treasury Yield!
The far left of starting point includes Lock down times. The Federal Reserve artificially pushed rated down with massive purchases during this time.
After the purchases stopped, rates were freed to roam as they normally would.
Rates move from a combination of expectations of Inflation, Growth and long term credit worthiness. These forces have different strengths at different times. In the US, Credit worthiness usually is very minor.
Pro Tip: The 10 year yield should estimate GDP and CPI or Growth and Inflation over time…
Have a Great “10 Year Interest Rate Analysis” Day!
John A. Kvale CFA, CFP
AI Content Authenticity: All of the following text content has been completed by myself and has not been edited or created by AI. Occasionally we do use AI for images and will note when appropriate.
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
