Treasury yields in the United States rose on Monday as investors remained anxious that interest rates could remain higher for longer than expected.Market mood remained negative, while government bond yields rose, reflecting the current cautious approach. Investors are anxious that global central bankers would extend monetary tightening initiatives to combat inflation.China, on the other hand, …
Treasury yields in the United States rose on Monday as investors remained anxious that interest rates could remain higher for longer than expected.
Market mood remained negative, while government bond yields rose, reflecting the current cautious approach. Investors are anxious that global central bankers would extend monetary tightening initiatives to combat inflation.
China, on the other hand, remained in the eye of the storm, with reports that government land sales revenue fell for the 19th straight month in July. On Monday, the People’s Bank of China (PBoC) lowered the one-year Loan Primer Rate by 10 basis points (bps) to 3.45%, as predicted, following similar steps last week and falling short of expectations for greater measures. The Yuan plummeted in response to the news, as speculators awaited a more robust step to support the local currency. UBS lowered China’s 2023 real GDP growth prediction to 4.8% from 5.2% earlier in the day.
In addition, the German Bundesbank’s monthly report indicated that inflation could remain over the central bank’s forecasts for a longer period of time, while growth is expected to be virtually flat in Q3.
This follows the release of minutes from the Fed’s most recent meeting last week, which hinted that additional rate hikes could be announced depending on the strength of the economy and whether inflationary pressures persist.
Since the Fed’s July meeting, officials have indicated conflicting views on whether future interest rate increases are required.
Most investors had anticipated and expected that the Fed’s last interest rate hike at its July meeting would signal the end of the Fed’s rate-hiking cycle. Since early 2022, the central bank has raised interest rates 11 times in an attempt to slow the economy and reduce inflation.
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