United States interest rates rose last week in the bond market, responding to signs that point to economic recovery, reports analysts at Palatine Financial. Treasury yields have been rising due to weak demand and signs of economic growth. Yields will usually rise when the economy grows and improves because investors begin to take riskier investments in search of greater returns. Inflation also increases when the economy starts to improve, so interest rates and treasury rates must be boosted to reflect inflation.
The yield on the 10 year treasury rose note reached four percent for the first time since June. This benchmark yield has not risen above four percent since the credit crisis began in 2008. It ended the trading session at 3.94 percent on Good Friday. The yield was down to 2.06 percent in December of 2008 before it began its slow recovery.
Signs of U.S. economic recovery continued into this week as well. Palatine Financial reports that Monday’s trading showed a movement of investors from Treasury bills to stocks. A separate private trade group reported that the service sector grew at its fastest pace since 2007 in March. Finally, the National Association of Realtor’s home sales index reports that February sales in the United States were more than was anticipated.
