US Investors started pulling out of the bond market as the expected federal reserve benchmark interest rate cut is not about to happen in the near future. The labour market is also showing a healthy trend as the jobless claims for benefits have reduced by about 12000 in the past week. Also the import prices have increased by about 1% as compared to a meagre 0.3% for exports. Expected inflation which will reduce the returns on fixed interest investments is the main reason for the investor’s reaction. In the previous weeks the expected interest rate cut had caused the treasury yields to become lower whereas now the reverse is happening thereby driving the yields from the bond market higher.

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