Benchmark interest rates rise worldwide

<p>Kia ora,</p><p>Welcome to Thursday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news the global bond rout is gathering pace. </p><p>The US 10-year Treasury yield, the benchmark for borrowing costs worldwide, has risen to 4.11%, the highest since October 2008, with investors fretting about the prospects of a recession from aggressive central bank actions to tame inflation. Minneapolis Fed President Neel Kashkari was the latest policymaker to <a href="https://www.youtube.com/watch?v=VCMbljmGDms" target="_blank"><strong>warn</strong></a> that the American central bank might need to lift its policy rate above 4.75% if underlying inflation continues to accelerate.</p><p>In the US, the widely-watched <a href="https://www.federalreserve.gov/monetarypolicy/files/BeigeBook_20221019.pdf" target="_blank"><strong>Beige Book</strong></a> review of the US economy by the Federal Reserve regional members paints a picture of a "modestly expanding" economy, with some wide regional variations. Retail activity is flat they noted, but factory activity is expanding. Employment continued to rise at a modest to moderate pace they noted, and although price growth remained elevated, some easing is showing up in a number of regions.</p><p>American <a href="https://www.census.gov/construction/nrc/pdf/newresconst.pdf" target="_blank"><strong>new housing starts came in lower</strong></a> in September than for August, but remained at around the 1.5 mln annual rate level they have been since April. Residential building consents rose slightly, and completions remained stable as they have for the past five years.</p><p>US <a href="https://www.mba.org/news-and-research/newsroom/news/2022/10/19/mortgage-applications-decrease-in-latest-mba-weekly-survey" target="_blank"><strong>mortgage applications however dipped yet again</strong></a> last week, extending the long string of declines that