A Ceiling for 10-Year Treasury Yields
Historically, the spread between the yield on 10-year U.S. Treasuries and the federal funds target rate has never exceeded 400 basis points. As the U.S. Federal Reserve remains committed to keeping the federal funds rate unchanged in the 0-0.25 percent range for a considerable period of time, the current rally in 10-year Treasury yields is unlikely to push beyond 4 percent without a rate hike.
HISTORICAL SPREAD BETWEEN THE 10-YEAR TREASURY YIELD AND THE FEDERAL FUNDS TARGET RATE