Policy rates and ten-year yields across 11 markets
Hong Kong's ten-year yield of 3.85% sits below its Base Rate of 4.00%, a gap of minus 15 basis points. Only Hong Kong and Taiwan are inverted this way, and in Hong Kong the policy rate is set by a formula rather than by local conditions.
The Federal Reserve raised rates on 16 September 2026 and interest rates are in the news again. Most of that coverage is about one number, the policy rate, while the cost of actually borrowing or lending for years at a time is set in the bond market. Putting both on one table for 11 markets shows where Hong Kong sits, and it is an unusual place.
Where Hong Kong sits in this table
The short end and the long end are pointing at each other.
Hong Kong's ten-year yield of 3.85% minus its Base Rate of 4.00%. One of only two negative values in the table
| Measure | Hong Kong | Position among 11 markets |
|---|---|---|
| Policy rate | 4.00% | Third highest |
| Ten-year yield | 3.85% | Sixth highest |
| Ten-year minus policy | −15 bp | Most negative |
| Change over one year | +84 bp | Below the average of about 100 |
| Real ten-year yield | +2.20 points | Third highest |
There is a structural reason for the first two rows. The Base Rate is not chosen in response to Hong Kong conditions; it follows a published formula tied to the US target range and HIBOR. The ten-year yield is priced locally by buyers and sellers. When the two ends are set by different processes, they can end up pointing in opposite directions.
Policy rates and ten-year yields, 11 markets
Policy rates and ten-year yields, 11 markets
Ten-year
Shared linear scale from zero. Selected entries from the table below. Its dates, units, definitions and limitations still apply.
| Market | Policy rate | Ten-year | Ten-year − policy | Over one year |
|---|---|---|---|---|
| Philippines | 5.00% | 7.53% | +253 bp | +157 bp |
| Indonesia | 5.75% | 7.16% | +141 bp | +83 bp |
| United States | 3.75-4.00% | 5.02% | +114 bp | +96 bp |
| Vietnam | 4.50% | 4.57% | +7 bp | +88 bp |
| South Korea | 3.00% | 4.55% | +155 bp | +176 bp |
| Malaysia | 2.75% | 4.18% | +143 bp | +77 bp |
| Hong Kong | 4.00% | 3.85% | −15 bp | +84 bp |
| Japan | about 1.00% | 3.00% | +200 bp | +140 bp |
| Singapore | no policy rate | 2.52% | — | +76 bp |
| Thailand | 1.00% | 2.35% | +135 bp | +91 bp |
| Taiwan | 2.00% | 1.94% | −6 bp | +56 bp |
Policy rates are as at 17 September 2026; ten-year yields are values retrieved on 15-16 September 2026. The spread column uses the midpoint of a target range where one exists (3.875% for the United States). Singapore runs monetary policy through an exchange rate band and has no policy rate, so that cell is blank.
What moved over the past year
Every one of the 11 markets saw its ten-year yield rise.
Markets where the ten-year yield rose over the past year. Average increase about 100 basis points
Hong Kong’s +84 basis points is a little below that average, which is what a market importing its short rate would look like when the exporting market’s long end rises less than others.
The Base Rate of 4.00% shown here is the last published figure confirmed as at 16 September 2026. Under the formula the FOMC decision of 16 September feeds through, so the current value should be read from the HKMA's own Base Rate page. If it changes, the sign in the spread column may change with it.
How does this relate to money growth?
Here are the same markets with their M2 growth rates.
| Market | Ten-year | M2 year-on-year | Consumer prices year-on-year |
|---|---|---|---|
| Philippines | 7.53% | +9.02% (July 2026) | +6.19% (July 2026) |
| Indonesia | 7.16% | +8.32% (July 2026) | +2.88% (July 2026) |
| United States | 5.02% | +5.41% (July 2026) | +3.30% (July 2026) |
| South Korea | 4.55% | +5.80% (July 2026) | +3.09% (August 2026) |
| Malaysia | 4.18% | +6.78% (June 2026) | +1.78% (July 2026) |
| Hong Kong | 3.85% | +2.65% (June 2026) | +1.65% (July 2026) |
| Japan | 3.00% | +2.18% (July 2026) | +1.90% (July 2026) |
| Singapore | 2.52% | +4.02% (June 2026) | +1.76% (April 2026) |
| Thailand | 2.35% | +5.47% (July 2026) | +1.95% (July 2026) |
| Taiwan | 1.94% | +7.42% (July 2026) | +2.54% (July 2026) |
Vietnam is left out of this table because this site holds no money supply series and no recent price series for it.
Correlation with the ten-year yield — M2 growth on the left, consumer price inflation on the right (ten markets)
Money growth points in the right direction but explains only half. The stronger link to prices is unsurprising: what erodes a ten-year bond’s return is inflation, not the money aggregate itself. Money supply is one of several routes to prices, and it does not get priced directly into a yield.
Hong Kong sits where this relationship would put it, with the second-slowest money growth and a yield in the lower half. Taiwan is the clearest exception, with M2 up 7.42% and the lowest yield in the table.
These correlations come from a sample of ten markets whose reference months do not line up (money supply April to July 2026, prices April to August 2026). Read them as a summary of one moment's arrangement, not as causation.
What is left after inflation?
| Market | Ten-year | Prices | Real |
|---|---|---|---|
| Indonesia | 7.16% | 2.88% | +4.28 points |
| Malaysia | 4.18% | 1.78% | +2.40 points |
| Hong Kong | 3.85% | 1.65% | +2.20 points |
| United States | 5.02% | 3.30% | +1.72 points |
| South Korea | 4.55% | 3.09% | +1.46 points |
| Philippines | 7.53% | 6.19% | +1.34 points |
| Japan | 3.00% | 1.90% | +1.10 points |
| Singapore | 2.52% | 1.76% | +0.76 points |
| Thailand | 2.35% | 1.95% | +0.40 points |
| Taiwan | 1.94% | 2.54% | −0.60 points |
The Philippines leads on the nominal figure at 7.53%, but inflation of 6.19% leaves +1.34 points. Choosing a market on the nominal number alone misses that gap.
Hong Kong moves up the ranking once inflation is removed: sixth on the nominal yield, third on the real one, because consumer prices rose only 1.65% in the year to July 2026.
Try it with your own figures — enter an amount and a period in the past money calculator to see the M2-based and the price-based answer side by side.
Open the past money calculator →
When should you not use these figures directly?
First, the sources are mixed. The ten-year yields in the table come from a single retrieval source so that the rows are comparable, and they differ from official publications: the US Treasury published 5.00% for 15 September 2026 and Japan’s Ministry of Finance published 3.028% for the same day, both a few basis points from the table. Where precision matters, use each market’s official publication.
Second, the reference dates do not line up. Policy rates are 17 September 2026, yields are 15-16 September, and money supply and prices fall between April and August 2026.
Third, three decisions were unpublished at the time of writing: Taiwan’s central bank board (17 September), the Bank of Japan (18 September) and the HKMA Base Rate reflecting the Federal Reserve increase.
Questions & answers
Why is a ten-year yield below the policy rate unusual?
A ten-year lender normally asks to be paid for ten years of inflation and fiscal risk, so the long yield usually sits above the overnight rate. When it sits below, the market is either expecting lower rates ahead or demand for long bonds exceeds supply. In September 2026 only Hong Kong and Taiwan were in that position.
Does the HKMA choose Hong Kong's policy rate?
Not the way a floating-rate central bank does. Under the Linked Exchange Rate System the Base Rate is the higher of the US target range lower bound plus 50 basis points, and the average of the five-day moving averages of overnight and one-month HIBOR. The ten-year yield, by contrast, is priced by buyers and sellers in the local bond market.
Does faster money growth mean higher long-term yields?
There is a tendency, but it explains only part. Across ten markets the correlation between M2 growth and the ten-year yield is 0.59, while the correlation with consumer price inflation is 0.74. With a sample of ten, treat it as a direction rather than a rule.
When are these figures from?
Policy rates are as at 17 September 2026 and ten-year yields are values retrieved on 15-16 September 2026. Money supply and consumer prices are each market's latest published month, ranging from April to August 2026, and the table notes the reference month for each.
Source
- CapsWindow - Data & methodology ↗
- Federal Reserve - FOMC statement, 16 September 2026 ↗
- US Department of the Treasury - Daily Treasury Yield Curve Rates ↗
- Ministry of Finance Japan - JGB interest rates ↗
- TradingEconomics - Government bond 10Y (values and year-on-year change for 11 markets) ↗
- HKMA - Base Rate under the Linked Exchange Rate System ↗
- HKMA - Monthly Statistical Bulletin, Table 2.2.1 (money supply) ↗
- BIS - Long consumer prices database (Hong Kong CPI) ↗