WSJ: Business Feels Pinch of Swift Rate Rise
The Wall Street Journal reports that sharp increases in long-term interest rates, triggered by Federal Reserve statements last week, threaten sales of homes, cars and other big-ticket items that have helped drive the U.S. economic recovery.
The Journal notes that rates on investment-grade-rated corporate bonds went to 3.47% from 2.73% and yields on 10-year U.S. Treasury notes were 2.54%, up from 1.94%.
The Journal said that interest rates had been rising since early May, but shot up sharply after Fed Chairman Ben Bernanke’s June 19 news conference where he said the central bank could end an $85 billion-per-month bond buying program by the middle of next year if the economy continues to improve.
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