U.S. Economic Resilience Points to Possibility of Higher Neutral Policy Rate -- Market Talk

0514 GMT - ​The resilience of the U.S. economy raises the possibility that the neutral policy rate is higher than previously assumed, New York Life Investment Management​'s Julia Hermann​ says in a note. However, further increases in​ Treasury yields could begin to challenge the very growth resilience that has allowed markets to absorb tighter financial conditions​, the global market strategist says. The market's sweet spot depends on higher rates remaining a reflection of economic strength​, she says. New York Life Investment Management prefers short-maturity, short-duration credit for its attractive income generation potential. ​"With yields remaining volatile at the long end, we see limited compensation for extending duration​," she says. (emese.bartha@wsj.com)

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October 15, 2026 01:14 ET (05:14 GMT)