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Another interest rate increase is creeping its way through the economy. But this time it didn’t come from the Federal Reserve. Spooky season is upon us, and so is the phantom rate hike.

The recent surge in Treasury yields has unleashed an array of anxiety goblins, from fears of a stock market slump to worries about ballooning interest payments on government debt.

But policymakers also see rising yields as a way to slow the economy without having to go through the trouble of raising rates again.

In effect, elevated yields can do the work of central bankers for them — functioning as a rate hike without instituting an actual rate hike.

This isn't the only time recently where we've seen a phantom rate hike. In March Fed Chair Jerome Powell noted that the bank failures and associated turmoil essentially acted as another rate hike.

Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards

Long-term Treasury yields have a direct influence on households and businesses. They impact the cost of mortgages, car loans, and taking on other types of debt. So increasing yields have a tightening effect, slowing economic activity.

Though it's receded this week, the 10-year Treasury yield (^TNX) has risen to levels last seen in 2007, climbing roughly 30 basis points since the Fed’s meeting in September.

Fed Vice Chair Philip Jefferson pointed to the rise in yields and their impact in a speech earlier this week, pledging to "remain cognizant of the tightening in financial conditions through higher bond yields ... as I assess the future path of policy."

Jefferson said that the Fed is in a particularly sensitive period of managing risk, having to balance between the twin risks of too loose and too tight.

Other Fed officials have chimed in on the bond market acting like a pinch-hitter.

“We're just kind of keeping a very close eye on that, and then we'll see how these higher rates feed into what we're trying to do in policy,” said Fed Governor Chris Waller on Wednesday.

But as with the Fed’s previous rate increases, a rise in inflation or other unfavorable observations could force the central bank to move. And if yields slide, their tightening effect would diminish, creating a greater need for the Fed to enact a genuine hike instead of relying on a substitute.