Congress and President Joe Biden's administration seem unaware that rising interest rates are about as "transitory" as they told us inflation would be—meaning, likely to be around for quite a while. Why does this matter? Ask someone who's been enticed by a mortgage with a variable interest rate that starts low and then rises quickly when conditions change.
Over the past month, yields on 10-year notes have risen sharply to 4.8 percent, well above the prevailing rate over the past 16 years. Meanwhile, two-year Treasuries are paying a 5.2 percent yield, and three-month Treasury bills are paying 5.5 percent—much higher than the rates projected by the Congressional Budget Office (CBO) in February. For this quarter, CBO assumed a ten-year yield of 3.9 percent; it's currently 4.7 percent.
