Long-term interest rates in the United States are rising, and are likely to continue heading up. Over the past 20 months, the yield on ten-year Treasury bonds has more than doubled, from 1.38% to 2.94%. Why is this happening? About half of the 1.56-percentage-point rise is attributable to an increase in the real interest rate, as measured by the inflation-indexed ten-year Treasury bonds, whose expected real yield has risen from zero in July 2016 to 0.82% now. The other half of the rise in the interest rate reflects the increase in the expected rate of inflation from 1.38% to 2.12%. High and rising interest rates have ... (full story)