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Investors will monitor two data releases over the next few days to better understand how the Federal Reserve will raise interest rates.
Photo:
Andrew Harrer / Bloomberg News
Investors will look again at the health of the economy this week when the government releases its first estimate of gross domestic product for the third quarter, followed by personal consumption spending on Oct. 29. higher, although recent data suggest that, even with strong economic growth, inflationary pressure remains moderate.
US government bond yields reached multi-year highs in October, supported by a series of strong economic data:
Meanwhile, traders believe the Fed will continue to tighten its monetary policy with its rate increase campaign:
Although bond yields have risen, inflation expectations have remained subdued. The price of funds offering bond investors protection against inflation has decreased:
Some analysts say this shows that inflation, while rising, is not likely to rise rapidly:
This could help generate new gains for bondholders, who outperformed broader stock market indices in October:
Write to Akane Otani at [email protected]
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