The confirmation of the weakness in the international stock market stunned investors and lifted expectations that the Federal Reserve would be forced to cut interest rates. After last week’s miserable job scenario, the investors in treasury securities are very sure that the Federal Reserve is about to get on a sequence of federal funds rate cuts. They are particularly worried about the recent economic weakness that can be an attribute to the lack of business confidence more than weak-hearted consumers.
Experts believe that – It is not the consumer but the businesses that are frightened. It is clear that the consumer demand is holding up and helping the market to sustain the 2 percent of growth.
On the other hand, the loss of 4,000 jobs in the month of August, were the first drop in four years. This suggests that the Federal Reserve is behind the curve in lowering the rates. On this Mr. Peter Morici, a professor of business stream at the University of Maryland said. “There is fear out there. But we are probably going to see strong productivity because employers are unwilling to hire.”
The return on 10-year Treasury notes plunged 14...
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