Written by Millan Chauhan

US markets are currently weighing up whether the Federal Reserve will implement a further interest rate hike at their next scheduled meeting at the end of October. At the Federal Reserve’s last meeting, rates were held steady at a target range of between 5.25% – 5.50%. Over the last few weeks, we have seen yields on longer-dated US Treasury Bonds move higher following the Federal Reserve’s narrative that interest rates could be higher for longer. Over the course of last week, we saw yields on 30-year US Treasury Bonds reach 4.9% which we haven’t seen happen since 2007.

However, at the end of last week, we saw the Bureau of Labor Statistics release the latest US jobs report which surprised markets as we saw an additional 336,000 roles added to the workforce which was well above the consensus of 170,000 and above August’s revised figure of 227,000. With the labour market remaining stronger than expected, there could be one further interest rate hike implemented by the Federal Reserve. Ahead of the Federal Reserve’s next meeting, we are expecting to see the latest US inflation data be revealed this Thursday with consensus leaning towards 3.6%.

Elsewhere, in the UK, house prices fell for a sixth consecutive month as prices fell -0.4% month-over-month in September. House prices began to come under pressure from April onwards as rising borrowing costs have reduced the affordability of new mortgages.


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