Bond prices have been on a near 30-year run higher although have edged back in recent months with some experts predicting which the rally could today be over. Many point to a pickup inflation — which is actually traditionally bad for fixed income assets — as well as a central bank which is actually raising interest rates. Investors have closely monitored completely new data in recent weeks on the state of the U.S. economy, which is actually nearly at full employment.
Furthermore, some reports show which investors are also concerned over a potential shutdown of the U.S. government on Friday, if the Senate doesn’t approve a bill to keep the idea afloat.
“The economy is actually growing close to 3 percent even before the stimulus through tax reform, inflation has moved away through last year’s low levels, which was due to quite a few one-off negative shocks, as well as we expect the upward cyclical pull on inflation through tight labor markets to increasingly outweigh structural downward pressure through factors such as technology,” Tan added.
On Thursday, yields rose after the Labor Department said which the number of people filing for unemployment benefits dropped to its lowest level in 45 years.
According to J.P. Morgan Asset Management, the 10-year Treasury yield will edge higher throughout 2018 towards, although not above 3 percent, as central banks relax their stimulus.