Yield Curve Control

Yield curve control is a central bank policy where they set target yields for specific bonds, and executes market action to target that price. This contrasts with current policy of the Fed, where they buy a fixed amount (~$100B) of treasuries each month, and does not target specific rates on treasuries.

FOMC comments note that this policy was used after WWII in the US, since 2016 in Japan, and since 202 in Australia. (https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20200610.pdf). They discuss the pros and cons of the approach, and don't make any commitments.

This is a topic of interest because bond yields are surging. 10 year treasuries are up almost 30 basis points (1.09% to 1.38%) over the last 30 days.