Overnight Lending Rate Hits 10-Year High

To no one’s great surprise, this week saw the Federal Reserve raise its overnight lending rate for the fourth time this year. This latest quarter-point hike to a range of 2.5 to 2.75 percent lifted the benchmark rate to the highest level since 2008. The increase is in response to the U.S. economy’s continued strength. At the same time, the Fed has also signaled that it expects to slow rate hikes next year. The yield on the 10-year Treasury moved in to 2.79 percent, some 19 basis points lower than the beginning of the month. Unless some unexpected calamity develops before the end of the year, 10-year yields will finish much lower than analysts projected for 2018.