Interest rates in the US may not return to pre-pandemic levels - Yellen

Janet Yellen doubts the return of interest rates in the US to pre-pandemic levels due to inflation and the rise in bond yields

US Treasury Secretary Janet Yellen
US Treasury Secretary Janet Yellen / Federalreserve, Public domain

The US Treasury Secretary, Janet Yellen, considers it unlikely that market interest rates will return to the levels observed before the onset of the COVID-19 pandemic, which triggered a spike in inflation and an increase in bond yields, reports "Interfax-Ukraine".

In a conversation with journalists, she explained that the forecasts published by the White House recently reflect high expectations for interest rates in the coming years, based on an analysis of current market trends and private sector forecasts.

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This is confirmed by the dynamics of the yield on 10-year US government bonds, which, since October of last year, has exceeded 5% following an aggressive rate hike by the Federal Reserve System to combat inflation and is currently just under 4.2%.

Experts continue to debate whether rates will decrease in the long term to pre-pandemic levels or remain elevated.

The budget for the 2025 fiscal year includes an average yield of 4.4% on 10-year government bonds, significantly higher than the forecast of 3.6% made a year earlier.

This is expected to increase the overall budget deficit and the indicators of national debt, with a project expenditure of $890 billion, or 3.1% of GDP, on net interest expenses this year.

Previously, we wrote that the prices of gold and silver are showing significant growth, with gold approaching its historical maximum and silver reaching the highest mark for the last month. Gold increased its value by 0.5%, while silver rose by 2.6%. This rise in precious metals prices is due to the falling US dollar rate and rising inflation expectations.

Also, the US Department of Energy raised its forecast for the price of Brent crude oil by $5 per barrel for 2024-2025 due to the extension of production cuts introduced by OPEC+.

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