NEW YORK, (Reuters) – The U.S. benchmark reached 3% Monday for the first time since December 2018. This psychological milestone could have significant implications for other financial markets.

This yield, which is 10 years old, serves as a barometer of interest rates for both mortgages and other financial instruments. The yield has risen in the past two months because the bond market was preparing for the Federal Reserve’s move to reduce its balance sheet. This ballooned from nearly $9 trillion to almost $9 trillion when the central bank purchased bonds during the Pandemic. Quantitative tightening is the process of reversing all these purchases.

Federal Open Market Committee will meet this week. They are expected to increase the target fed funds rate by 50 basis point to 0.75%-1.0% Wednesday and to reveal their balance sheet plan.

A Fed reduction in the buying of government debt may help to lift yields. It could also push longer-dated Treasuries above the ones on the other end.

Companies’ share prices are also affected by higher borrowing costs.

The yield on the 10-year U.S. Treasury note was last recorded at 3.03%. This is an 11-basis point increase.