The US stocks returned to their bullish mode, with prices rising after Treasury Bonds, which hammered them for 52 weeks, started showing declining returns on investments in their 10-year papers with the war in Middle East, stock market reports said.
US stocks jumped on Friday as bond yields continued to see downward pressure. The 10-year Treasury yield fell 10 basis points to 4.60 per cent, which is 28 basis points below its recent 52-week high.
Philadelphia Fed President Patrick Harker made dovish comments, signalling that the Fed is done hiking rates. The stock markets, such as the NYSE and NASDAQ were in bearish trends for some time as they feared further interest rate hikes intervention by the Federal Reserve to rein in inflation which had returned at 3.7 per cent in September.
Bond yields started going down the roller coaster since the Israel Hamas war broke outin the middle east as investors put on their safety belts and became wary of buing Treasury bonds of the US governments which guarantee secure returns on investments. A wave of Federal Reserve officials making dovish comments about the future path of interest rates shied investors from investing in treasury bonds.
US Treasury bonds are traded in all international stock exchanges as a safe reserve as its backed by the US Federal Reserve of the government and the yields are steady at a minimum of around 6 per cent.
Fed’s dovish talks continued through Friday, with Philadelphia Fed President Patrick Harker believing that the central bank is at a good spot to pause its interest rate hikes.
“Absent a stark turn in what I see in the data and hear from contacts. I believe that we are at the point where we can hold rates where they are. Look, we did a lot, and we did it very fast,” he said in prepared remarks to the Delaware State Chamber of Commerce, the Business Insider reported.
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