News US Economy News Treasury Yield Rises to 14-Month High on Inflation Woes Off the Charts: The Visual Says It All By Medora Lee Medora Lee Medora Lee began covering the financial markets in 1992 and has interviewed U.S. Treasury secretaries and CEOs of Fortune 500 companies. Her work at outlets including Reuters, theStreet.com, and Forbes.com schooled her in stocks, commodities, and bonds and now she translates Wall Street for Main Street at The Balance. learn about our editorial policies Published on March 19, 2021 Share Tweet Pin Email Photo: Yellow Dog Productions / Getty Images The yield on the 10-year U.S. Treasury note—a bellwether for investor sentiment on inflation—surged to a 14-month high this week in a sign that investors weren’t assuaged by the Federal Reserve’s reassurances that consumer prices won’t get out of hand. But it isn’t only the rise that’s worrisome, say some analysts, it’s how quickly it’s climbing. Since the end of last year, the yield on the 10-year Treasury note had almost doubled to touch 1.75% on Thursday and Friday, an increase of 84 basis points, or 0.84%, in less than three months. The last time it was as high was before the pandemic. While rising yields may be a sign of increasing optimism about the country’s economic growth prospects, according to the Federal Reserve, they also signal a mounting fear that the economy could overheat and ignite strong inflation, which could in turn force the Fed to raise benchmark interest rates sooner than it had planned and before the economy has fully recovered from the pandemic. Or even worse, if the Fed is complacent and doesn’t do that, inflation could run away, some economists say. The Fed’s Federal Open Market Committee (FOMC) had a chance on Wednesday after its meeting to acknowledge the rise in yields and the possibility of inflation running hot and to discuss the tools the Fed has to combat those. But instead, it repeated pretty much what Fed Chairman Jerome Powell said earlier this month in a live streamed Wall Street Journal interview—that the rise in yields (from 1.37% to 1.54% that week) had caught his attention, but he was not concerned. He said then he would only “be concerned by disorderly conditions in markets or by a persistent tightening in financial conditions broadly that threatens the achievement of our financial goals.” The Fed has a dual mandate of stable consumer prices and maximum employment. For now, markets appear to be testing Powell to see what he would consider “disorderly” enough to change the Fed’s stance on inflation and interest rates. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Yahoo Finance. "Treasury Yield 10 Years." Washington Post. "Opinion: Larry Summers: My column on the stimulus sparked a lot of questions. Here are my answers." Federal Reserve Bank of Kansas City. "An Uncertain (Though Optimistic) Outlook for an Uneven Economy."