U.S. Long-Term Interest Rates at 5.2%: Composed of Real Rates and Uncertainty Factors
Real interest rates reflect how long U.S. benchmark rates will be maintained, along with growth and inflation expectations. Term premiums indicate uncertainty about whether there will be sufficient demand when U.S. Treasury bonds are issued.
Compared to February of this year, real interest rates expanded from 3.5% to 4.2%, and term premiums from 0.5% to 1%. While the market can absorb interest rate hikes driven by growth expectations, an increase in term premiums due to supply-demand uncertainty acts as a negative factor.


