Madison Investment head of fixed income Mike Sanders said investors closely watch the 10-year US Treasury yield as the benchmark risk-free rate underpinning global asset valuations. Traditionally it reflects growth and inflation expectations, but Sanders warned its drivers now also include the Fed’s policy path, energy prices, fiscal deficits and foreign investor demand. He added that when the Fed adjusts short-term policy rates to fight inflation or stimulate growth, the market-determined 10-ye

Madison Investment head of fixed income Mike Sanders said investors closely watch the 10-year US Treasury yield as the benchmark risk-free rate underpinning global asset valuations. Traditionally it reflects growth and inflation expectations, but Sanders warned its drivers now also include the Fed’s policy path, energy prices, fiscal deficits and foreign investor demand. He added that when the Fed adjusts short-term policy rates to fight inflation or stimulate growth, the market-determined 10-year yield often indicates how effective that policy has been.