The Wall Street Journal: With Interest Rates Up, Get Ready for Financial Drama
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Article by Jonathan Weil in The Wall Street Journal
Interest rates have soared. Can financial blowups be far behind? Maybe, but often it isn’t that simple.
The yield on 10-year Treasury notes topped 5% this week for the first time since 2007. While not high by historical standards, it is a big move from less than 1%, where it was for most of 2020.
“Five percent is more or less the average of investment-grade rates since the time of Alexander Hamilton,” said James Grant, founder and editor of Grant’s Interest Rate Observer. “The problem is the structures that ......