The Wall Street Journal Warns That Interest Rates Are Headed Higher

Justin Lahart, in the high profile Wall Street Journal column Heard on the Street, writes in the article titled, "Trouble Ahead for the Treasury Market":

The most important question in the financial markets today is whether bond yields will keep rising and how high they will go. If you untangle the forces driving the market, it is reasonable to see 10-year Treasury yields at 3.5% at the end of the year.

The Treasury is going to be very lucky if the 10-year yield only climbs to 3.5%. It says here that 5.0% is a very real possibility from its current 2.5% range, thanks to accelerating price inflation and Trump shifting significant government funding from taxation to debt financing.

  -RW