The Rate Cut Happened. Not All Borrowing Costs Are Going Down
The Federal Reserve is finally cutting interest rates. One key gauge of borrowing costs has been going up anyway. Yields on longer-term U.S. Treasurys have ticked higher since the Fed approved a 0.5 percentage point rate-cut last week. The yield on the benchmark 10-year U.S. Treasury note, which helps set interest rates on everything from mortgages to corporate bonds, settled Friday at around 3.73%, up from 3.64% the day before the Fed’s move. The climb is a reminder that the Fed doesn’t have complete control over borrowing costs in the country. The central bank manages short-term rates that banks charge each other for overnight loans, which shift costs on credit-card debt and other types of floating-rate loans.
More From The Wall Street Journal (subscription required):