Interest Rates Will One Day (Maybe Soon) Head Higher

by Gregory Litts on Jun 17, 2015

Interests, Investments, Bond

The Fed is preparing to increase short rates from zero, as the improving economy and labor markets no longer warrant such extreme accommodation. However, many analysts believe the fed funds rate increases will be small in magnitude and at irregular intervals. The fed funds rate governs the shortest interest rates, but yields on longer maturity Treasuries are influenced by other factors, such as supply and demand, growth and inflation. Global forces may also keep the increase in longer-term rates in check, as foreign central banks battle deflationary trends with low policy rates.

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