SINGAPORE : Tech shares slipped and short-term Treasury yields jumped on Tuesday as investors expect inflation to prompt interest rate hikes, with a hotter-than-forecast reading in Australia the latest sign of prices pressuring central bankers to act.
Strong earnings had earlier propelled Wall Street indexes to fresh records and U.S. stock futures were flat in early trade. Two-year U.S. Treasury yields leapt nearly 5 basis points to 0.4970per cent, a 19-month high. The Federal Reserve meets next Tuesday and Wednesday with crude oil and soft commodity prices hovering near multi-year peaks. [O/R][GRA/]
"The inflation overshoot has been persistent," they said."There is so much the Fed can tolerate before reacting ... it feels inevitable that that conversation will be brought up more and more as we go into next year." The yield on Australia's April 2023 government bond, which the RBA has targeted at 0.1per cent as a signal that the cash rate will be at record lows for years, rose as far as 0.237per cent in a direct challenge to the bank's intentions.
Monetary numbers do not say it all. Purchasing power & the availability of goods should be factors. My 80cents apple costing $10, is not ok.