Treasury Yields Reach Highest Levels Since Early October
Economic Data Reports: Recent reports show stronger-than-expected ADP employment (+42K vs +28K expected) and ISM services (52.4 vs 50.8 expected), indicating a healthier US economy.
Federal Reserve Concerns: The rise in the prices paid index to 70.0 raises inflation concerns for Fed officials, complicating their dual mandate as they aim for a 2% inflation target.
Market Reactions: The bond market is reacting to these economic indicators, with fears that yields may push through 4.20%, potentially impacting stock markets and the US dollar positively while negatively affecting gold.
Rate Cut Speculation: Current market pricing suggests a 61% chance of a rate cut in December, down from 68%, leading to potential shocks in stock markets if the Fed does not proceed with a cut.
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