The Federal Reserve may have held interest rates, but Citadel Securities argues its approach to monetary policy is helping keep long-term Treasury yields near multiyear highs. Long-dated yields are hovering around their highest levels in nearly two decades even though the Fed’s benchmark rate is now 175 basis points below its peak.
Citadel’s Nohshad Shah says the bond market increasingly believes policymakers, both at the Fed and in Washington, will choose the easier path when confronted with difficult economic decisions. That perception could keep upward pressure on longer-term borrowing costs and create broader risks across financial markets.