Reuters - Video

Edition: US | UK | IN | CN | JP

Finance Videos

Yields won't spike much even with Fed rate hikes

Monday, May 23, 2016 - 03:38

The yields on the ten-year Treasury will stay under two percent even if the Fed were to raise interest rates this year, says market economist Peter Cardillo.

▲ Hide Transcript

View Transcript

Stocks meandering in and out of positive territory this Monday let's send it in New York Stock Exchange to find out why with. Peter card jello he's chief market economist at first standard financial. Welcome Peter and a Peter what's behind. This direction illustrating that we're seeing today. Well I think you know the market is basically. Under fed watcher and I say that because this week we have a lot of fed speakers. In fact we're going to be hearing from. Yellen later in the week and of course you know most of defense because so far have been quite hawkish and I think. What we're seeing here. Is the Fed's beginning to pave the way for a rate hike down that rate hike. May come as soon as you if it doesn't come in June it's probably it'll probably come. Sometime in July or September. Well that you mention it and SP 500. It's nice to break three week losing streak even though that signal could raise rates mr. les Q as you point out. Can stocks continue to notched gains in the face. Of the more hawkish. Well you know I think the market is really not afraid of the Fed's rate raising. By 25 basis points. Look you know the evidences that the economy is doing quite nicely now. We've had a spring bounce there. And if you look at all the macroeconomic. News that we've gotten. Over the past three weeks there's no question that the economy is probably gonna grow. Close to warm and possibly one and three quarters percent in the second quarter fell. You know if you raise rates for the right reason the market is not going to be afraid of that OK but the market stocks Peter it and stuck in a trading range. He's in breaking out and what will be the catalyst. I think the market breaks out once we get clarity from the fact that they are going to raise rates and I think that we'll probably see. The summer months actually respond. To a former oil price and to better economic. That act activity. So I think we could see the market break out after the June effort mostly meeting. And we keep talking about stuff but what you see is outlook for for treasuries and investors worry about price declines with the Fed indicating they raise rates the company well I think I think yields are probably back up but not by that much. I think that ten year could probably knock. On the Q percent. Range and that probably means that that bonds doubled down a little bit not not by much luck. It even if the Fed raises by 45 basis points. You know we're looking at what fifty basis points up from zero that's not think that the economy can you can guy. Nicely handled that and Jack just there'll still be demand from perhaps overseas investors for a government securities. I think so you know one of the biggest they're out there at the British exit now that could. Keep the Fed from raising in in June and perhaps. Doing it either in July to September. But. I kind of think that. Great Britain is not likely to exit the EU. And so that would be positive. For global stocks as well as domestic thought OK thank you for sharing movies. My pleasure my thanks to Peter kargil the first standard financial I'm Fred Katayama and this is what you.

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

Yields won't spike much even with Fed rate hikes

Monday, May 23, 2016 - 03:38