Yellen Indicates Interest Rate Increase if the Economy Continues to Perform
This month, the selloff in Treasuries had a connection to the bond commotion in Europe. Janet Yellen the Federal Reserve Chair repeated to the investors that any additional losses in bonds may result into stronger U. S. economy and credit tightening by the central-bank.
For the fourth time in the past five weeks, there was a rise noted in the ten-year yields all resulting from the anticipation of the interest rates rising in the near future. On Friday, in a speech Yellen said that a rate increase will be suitable in the present year "if the economy continues to improve."
Reports released by the government in the present week reveals that last month development of new houses touched a seven-year high and the rate of inflation surpassed forecasts.
According to data gathered by CME Group, traders estimated that there is a twenty seven percent chance for the Feds to raise the interest rates in September. That is an increase in optimism, as the percentage was 24 on May 21. There was also a leap in expectations hat says , the central bank will hike the rates sometime by the year end as the percentage of optimistic people rose from 56 percent to 62 percent.