Skip to Content
Credit Insights

Pace of Rising Interest Rates Should Moderate

As the 10-year Treasury approaches 3%, the pace at which interest rates are rising will slow, but the Fed could begin to taper its bond-buying program after its September meeting.

Mentioned: , , , , , , , , ,

In May, we opined that as soon the Fed intimated to the markets that it would begin tapering its asset-purchase program, interest rates would rise by 100-150 basis points. In the Federal Open Market Committee's May statement, it added the following new language: "The committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes." This provided the market with its first hint that the FOMC was contemplating reducing its asset-purchase program, precipitating the recent rise in interest rates. 

Later in the month, in response to questioning from the Joint Economic Committee, Federal Reserve chairman Ben Bernanke was more specific, saying the FOMC could begin reducing asset purchases as soon as a few meetings from May. Soon thereafter, the FOMC released the minutes from the April 30-May 1 meetings. These minutes highlighted the fact that a number of members believed the current asset-purchase program should have been decreased as early as the June meeting (with one participant recommending beginning decreasing purchases immediately).

David Sekera does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.