Story perspectives

Federal Reserve Mulls Yield Curve Control Amid Rising Yields

9/14/2025

26 5

Summary

Story summary

The Federal Reserve may consider yield curve control (YCC) to manage long-term interest rates, a strategy not employed in over 70 years.
President Trump's administration pressures the Fed, risking its independence and raising long-term Treasury yields.
The Fed's balance sheet grew significantly during the Covid crisis, raising concerns about financing government spending.
Long-term Treasury yields have lagged, reflecting inflation and fiscal risks, increasing debt-service costs.
Economists advocate for closer coordination between fiscal and monetary policies, which could lead to YCC.

1 of 1

Story summary

The Federal Reserve may consider yield curve control (YCC) to manage long-term interest rates, a strategy not employed in over 70 years.
President Trump's administration pressures the Fed, risking its independence and raising long-term Treasury yields.
The Fed's balance sheet grew significantly during the Covid crisis, raising concerns about financing government spending.
Long-term Treasury yields have lagged, reflecting inflation and fiscal risks, increasing debt-service costs.
Economists advocate for closer coordination between fiscal and monetary policies, which could lead to YCC.