Kind of depends, some banks need the liquidity to satisfy withdrawals or anticipated withdrawals. Many that are withdrawing are buying short term treasuries or putting it in money markets and that does have an effect on shorter duration bonds. As you move out the yield curve, look at the unprecedented whipsawing of the 2-year treasuries, the 10 year hasn't been as violent. The 10 year is what impacts the mortgage rates. Business loans are in the middle and that's where the fed wants to extinguish demand to reduce the money supply and quell inflation. It isn't an exact science and throw in the lag effect and you can see how mistakes can be made on the upside and the downside.