Key Points
In the run-up to the US Federal Reserves interest rate decision earlier this month, the markets had reckoned that the bond market was doing the central banks job and, therefore, there was no need for the Fed to raise rates...
US treasury yields had hit their highest in over 15 years in the run-up to the Federal Open Market Committees Oct 30-Nov 1 meeting, with the 10-year rising past 5% on Oct 23..
Treasury yields have been propelled higher in recent weeks, not only by expectations that the Federal Reserve will keep its policy rate elevated for longer than expected but also by growth in the supply of bonds and waning demand from central banks...
Federal Reserve Bank of Dallas President Lorie Logan said earlier last month that the surge in treasury yields may mean less need for the US central bank to raise its benchmark interest rate again...
The term premium or high bond yields is distinct from economic developments, and it would be best for the markets to react to the Fed instead of the Fed reacting to the markets...
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