Yellen hints at higher rates, spooks markets; Inflation's damage, explained - Jeff Christian
Stocks and metals prices slid on Tuesday as Treasury Secretary Janet Yellen hinted at higher interest rates.
“It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat,” Yellen said during an economic event hosted by The Atlantic magazine.
Jeff Christian, managing director of the CPM Group, told David Lin, anchor of Kitco News, that bond yields are likely to increase.
“Our expectation is that the 10-year T-bond is probably going to trade between, let’s say 1.55% and maybe 1.8%, 1.85% over the next five, six months. There is going to be upward pressure on it,” he said.
However, inflation expectations are overblown, Christian said, noting that spikes in prices in energy, lumber, and used cars, are temporary and prices are likely to stabilize again in the coming months.