Yields on 10-year US Treasuries have fallen sharply from as high as 4% in the week of Feb 27-Mar 3 to 3.54% on Mar 16. While 10-year yields have fallen below their 50- and 100-day moving averages, they remain above the 200-day moving average at 3.46%.
Will the US Federal Reserve raise rates on Mar 21-22? There is a 50:50 chance market strategists say. The Financial Times has reported that the chief economist at the OECD has urged central banks to continue raising rates. That may be the right thing to do in countries where there haven’t been any bank failures.
Bank failures have a similar impact on the economy as higher interest rates do. They usually stop people and companies borrowing, and they tend to cool the economy down. Back in 2008, bank failures cooled the global economy to the extent it went into recession.
In the meantime, yields on 10-year US treasuries retreated to 3.85% as at Mar 9, down from 3.98% a week ago. Yields on 10-year Singapore Government Securities have also fallen, to 2.94% as at March 17, from 3.23% as at March 10.
See also: STI may retreat on strong overbought pressures but REIT Index may break out
