Long Term Interest Rates Have Climbed Back Again
IT IS NOW just about <7 year since the Great Money Crunch of 1966 reached its peak and brought interest rates to the highest levels in 40 years. A lot has happened since then, but, in two important respects, the situation in the money markets looks a lot like it did a year ago.</br></br>For one thing, after declining through the fall and winter as the Federal Reserve shifted to easy money, long-term interest. rates have climbed back again. Corporate and Government bonds are actually above their 1906 highs, while mortgage rates and tax-exempt bond yields have retraced more than half their fall-winter dip. Short-term ralesÛÓ on 90-da.v Treasury bills, bank Certificates of Deposit, etc.ÛÓare still below last year's tops. Init they have also been heading up.</br></br>For another thing, the climate in the markets is again unrelievcdly pessimistic. As was the case a year ago, most market men are convinced that interest rates are going higher stillÛÓ short-term rates, especially.</br></br>THICKF, ARE also some differences from a year ago. however, and they are worth noting, too. To officials at such financial agencies here in Washington as the Treasury and the Federal Reserve Board, these contrasts are ns significant as the similarities.</br></br>There is, for example, no air of crisis in the market these days. Even those who expect interest rates to go higher do not talk of panic, as they were doing a year ago.