Analysis: Fed rate hike means bond yields will remain high

PANews, September 24, Federated Hermes fixed income strategist Karen Manna pointed out in a report that the Federal Reserve’s decision to raise interest rates by 25 basis points last week further confirmed the reality that bond investors will face for most of 2026: interest rates have risen significantly, and there is still uncertainty about the future downward path.

Karen Manna said that the multi-year high U.S. Treasury yields reflect a combination of factors, including the resilience of economic growth, continued concerns about inflation, the size of the fiscal deficit remaining high, and the market's continued reassessment of where "normal" interest rates should be. "While rising yields have created short-term price pressures, we believe they have also improved long-term investment opportunities for fixed income investors. This distinction is critical," she said.