Over the past month, the yield curve shifted higher while retaining its humped shape, with short and long rates lower than medium-term rates. Since the beginning of the year, short rates have moved up as long rates moved down. While the Federal Open Market Committee’s recent increase of 50 basis points (bp) in the target federal funds rate was reflected in a 10 bp increase in the three-month rate, it is harder to explain the 43 bp increase in the 10-year rate. Perhaps concern about inflation has also risen despite the FOMC’s action.
Suggested citation: "Interest Rates," Federal Reserve Bank of Cleveland, Economic Trends, no. 00-06, pp. 06, 06.01.2000.