Policy rates and ten-year yields across 11 markets
Bank Negara Malaysia held the Overnight Policy Rate at 2.75% through 2026, yet the Malaysian ten-year yield rose 77 basis points to 4.18%. The gap between the two is 143 basis points, and the real yield of 2.40 points is the second highest in the table.
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. Malaysia is a useful reminder that the two ends of the curve can move independently: the Overnight Policy Rate did not change all year, and the ten-year yield rose anyway.
Where Malaysia sits in this table
The policy rate stood still; the long end did not.
Malaysia's Overnight Policy Rate and its ten-year government bond yield. A gap of 143 basis points
| Measure | Malaysia | Position among 11 markets |
|---|---|---|
| Policy rate | 2.75% | third lowest |
| Ten-year yield | 4.18% | sixth highest |
| Ten-year minus policy | +143 bp | fourth widest |
| Change over one year | +77 bp | third smallest |
| Real ten-year yield | +2.40 points | second highest |
| M2 year-on-year | +6.78% | third fastest |
The Overnight Policy Rate was held at every meeting through 2026, most recently on 3 September, and the last change before that was a cut in July 2025.
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.
Note the two negative values. Hong Kong and Taiwan have ten-year yields below their policy rates, at −15 and −6 basis points. Malaysia sits in the ordinary part of the table, where the long end is well above the short end.
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
Malaysia’s +77 basis points is the third smallest, and it happened with no policy move at all. That is the point worth keeping: an unchanged Overnight Policy Rate does not mean unchanged financing conditions for anyone borrowing at longer maturities.
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.
Malaysia is a mild exception in the same direction as Taiwan. M2 growth of 6.78% is the third fastest here, while the ten-year yield of 4.18% sits in the middle and consumer price inflation is among the lowest at 1.78%. Money can grow quickly without showing up in either prices or long yields within the same twelve months.
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 |
This is where Malaysia’s ranking changes most. Sixth on the nominal yield, second on the real one, because inflation of 1.78% is among the lowest in the table.
The Philippines makes the opposite point: first 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.
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 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. 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
How can long-term yields rise while the policy rate is unchanged?
A central bank sets an overnight rate; a ten-year yield is a price set by buyers and sellers for ten years of inflation, growth and fiscal risk. Those are different questions. Malaysia held the Overnight Policy Rate at 2.75% through 2026 while the ten-year yield rose 77 basis points to 4.18%.
What does a 143 basis point gap between the two mean?
It is the compensation the market asks for lending long rather than overnight. A wider gap usually reflects expectations of higher future rates, more inflation risk or a larger supply of long bonds. Malaysia's gap is wider than the United States at 114 basis points and narrower than Japan at 200.
Does faster money growth mean higher long-term yields?
There is a tendency, but it explains only part. Across the ten markets with data 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) ↗
- Bank Negara Malaysia - Monetary Policy Committee meetings ↗
- Bank Negara Malaysia via data.gov.my - Money supply ↗
- BIS - Long consumer prices database ↗