…and today (Monday) the benchmark yield has (again) reached its highest level since 2007.
The Fed kept rates on hold last week but sent a clear indication that in order to bring inflation down to the 2% target rate there could be another hike this year. Stocks declined and the US Dollar rallied.
The US economy has proved resilient this year and has so far avoided the recession which seemed inevitable to most just a few months ago.
In the UK, the Bank of England also kept interest rates unchanged having raised at the last fourteen meetings. Following the announcement the Pound fell to its lowest level since March versus the US Dollar.
Recent economic data suggests that the BoE may have done enough – the central bank is now in let’s-wait-and-see mode. UK Inflation slowed unexpectedly in August, with CPI coming in at 6.7%, down from 6.8% in July.
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