The Federal Reserve
Federal Reserve Policies: Most monetary analysts agree that the Fed has no control over long-term interest rates. Some believe the Fed controls or strongly influences short rates through its hammer-lock control of the rate on Federal funds. But we are increasingly finding that the Fed is more ofter a follower than a leader.
Interest Rate Spreads: Interest rate spreads offer investors vital information about the course of the economy and financial markets and the trend direction in interest rates. Until early summer, spreads like the differential between the long T-bond and the Fed funds rate were opening up enough to cause concern about the Fed change in course to higher short rates. In recent weeks, most of the spreads have narrowed, thus lessening the chances of a run-up in short rates.