La Jornada: 30-year Treasury bonds, at their highest since 2007

U.S. borrowing rates hit their highest level since June 2007. Fears of inflation catapulted the yield on the 30-year U.S. bond above a 19-year high of 5.27 percent on Friday.

Last week’s message from the president of the Federal Reserve (Fed), Kevin Warsh, remains firm in the fight against inflation, but the decision to keep interest rates unchanged and the few clues about their future evolution have collided with market skepticism.

In a scenario marked by the rebound in oil and the persistence of inflationary pressures, investors are wondering how much longer the Fed can afford to wait before acting, economic analysts said.

In addition, the problem is also dimensioned in the microeconomic sphere, since credit card defaults in the United States are at the highest level since 2010 and mortgage rates could approach 8 percent.

Thus, specialists comment that higher interest rates are coming, than even the increase in the reference rate. The problem is that they arrive at a bad time, due to high debt.

“The lack of an upcoming guide, the rejection of a pause in a downward cycle that had begun and concerns about inflation and the war in the Middle East generated sharp falls in the markets, leading the Nasdaq 100 index to enter correction territory (10 percent drop from a recent high).

“Long-term Treasury bond yields (such as the 30-year) climbed to their highest levels since 2007 amid investor skepticism about rapid price containment,” described Carlos Ponce, founding partner and CEO of SNX.