Inflation in the US makes the bonds hold

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Inflation all over the globe is currently rising and going beyond control or getting harder to control or manage. In the past few days jumped to 10 years of high inflation whereas the US is also fearing the sights of inflation.

In October 2021 inflation went skyrocketing up. Us has seen 6.2 % of consumer price inflation. The US treasury market is on the high these weeks.

The bullish bondholders currently expecting higher yields on bonds due to this higher inflation. Investors are stick to the speculation that aging the population and high levels of debt increase the prices of bonds in the future.

The bondholders who are expecting higher rates in the future are bullish. They are betting the world’s biggest fixed-income market introduces the spike of the US 30 years old high as long-term shifts in the American economy keeps yields depressed.

The data shows that consumer prices have gone up by almost 6.2% in October 2021.

For some long time bond holding bulls the market’s nonchalance in the face of continuously increasing prices is typically kryptonite for debt investors vindication of the view that inflation won’t be lasting long and won’t dent the market in longer-term.

Whenever inflation will settle for economic recovery the pre-pandemic situation of low interest rates will be unchanged for most things.

On one hand, inflation is growing continuously higher and higher while on the other hand government is continuously trying to bring down the prices of goods and services. The continuous growing inflation is making chaos not only in the US but also all over the globe.

The global economy these days are interconnected and anything that in one country like, in this case, the US affects another country in the same or a similar manner.

Considering the US bullish market holding their bonds in expectation of higher yields in the future affects the Indian economy as well. Given the continuously growing inflation in some way or the other will affect India and other countries as well.

The UN recently stated global inflation will be going up because of the logistics and supply chain prices.

The speculations made are time being and will not last long.

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