Ten years treasury yeild determines the mortgage rates.. it is the most important number in macro economics.. it is not controlled by Fed ..

Flight to safety ! No ..

It's important to understand that the 10-year Treasury yield isn't "determined" by a single entity, but rather by market forces. Here's a breakdown of the key factors that influence it:

* Market Forces:

* The 10-year Treasury yield is primarily determined by the supply and demand of 10-year Treasury notes in the open market.

* Investors buying and selling these bonds drive the yield up or down.

* Key Influencing Factors:

* Inflation:

* Higher inflation erodes the purchasing power of future bond payments, so investors demand higher yields to compensate.

* Economic Growth:

* Strong economic growth often leads to higher yields, as investors may shift their funds towards riskier, higher-return investments.

* Federal Reserve (Fed) Monetary Policy:

* The Fed's decisions on interest rates and its bond-buying programs significantly impact Treasury yields.

* For example, when the Fed raises interest rates, Treasury yields tend to follow suit.

* Investor Confidence:

* In times of economic uncertainty, investors often seek the safety of Treasury bonds, driving up their demand and lowering their yields.

* Conversely, during times of economic confidence, investors tend to seek riskier investments, which will lower the demand for treasury bonds, and therefore raise the yield.

* Treasury Auctions:

* The U.S. Treasury Department holds auctions to sell Treasury notes, and these auctions play a role in setting the initial yield. However, the yield continues to fluctuate in the secondary market after the auction.

In essence, the 10-year Treasury yield is a reflection of the market's collective assessment of economic conditions, inflation expectations, and the Fed's policy outlook.