The Federal Reserve held rates steady yesterday after a 25-basis-points (bps) hike in September. With ongoing wars still pushing up near-term inflationary pressures, we continue to expect another 25 bps hike in December. The twin drivers of higher near-term inflation and an expected higher fed funds rate are in large part what’s been pushing up yields in the U.S. since March. The yield on 10-year U.S. Treasuries has recently risen to its highest level since 2002. Given that is the principal benchmark used internationally to price long-term borrowing costs, the cost of any debt that references it also increases--generally adding friction to markets and the global economy. However, historically tight corporate spreads in the U.S. show that investors perceive low
