A surge in US borrowing costs has bolstered investors’ conviction that the Federal Reserve is finished raising interest rates, after months of aggressively increasing them in a historic battle against inflation.
Yields on Treasury bonds reached the highest points in more than a decade this week, raising financing costs for businesses and consumers that could slow down the economy and tamp down prices without further action from US central bank.
The latest top official to back this view was Mary Daly, president of the San Francisco Fed, who on Thursday said the central bank does not need to “rush to any decisions” about interest rates at a time when the labour market is showing signs of cooling, price pressures have abated and Treasury yields have sharply risen.