After hitting a low of 3.37% on Jan. 30, long-term investment-grade interest rates headed higher. Interest rates jumped to 4.4% on June 26 from 3.56% on April 17. In the last half of the year, interest rates stayed in a narrow range between 4.38% and 4.03%.
The approximate 25-basis-point jump in 2015 will provide a tail wind to corporations’ defined benefit plans, whose investment returns will be challenged by a flat return environment in 2015. As Boeing noted in its 2014 annual report, a 25-basis-point increase in interest rates would reduce its projected benefit obligation by $2.449 billion, or 3.124%.