Analysis: Fed rate hike means bond yields will remain elevated

PANews reported on September 24 that Federated Hermes fixed income strategist Karen Manna noted in a report that the Federal Reserve's decision to raise interest rates by 25 basis points last week further confirms the reality bond investors face for most of 2026: interest rates have clearly risen, while the future path of declines remains uncertain.

Karen Manna said that the multi-year high U.S. Treasury yields reflect the combined effect of multiple factors, including resilient economic growth, persistent inflation concerns, a persistently large fiscal deficit, and the market's ongoing reassessment of where a "normal" interest rate level should be. She said: "Although rising yields have brought short-term price pressure, we believe this has also improved the long-term investment opportunities for fixed income investors. This distinction is crucial."