The share of economists predicting the Federal Reserve will reduce bond buying in December doubled after a government report showed back-to-back monthly payroll gains of 200,000 or more for the first time in almost a year.
The difference between yields on two- and 10-year Treasuries widened to the most since 2011 as employment gains reinforced expectations the Federal Reserve is close to slowing bond purchases used to stimulate growth.
Asian stocks fell this week, with the regional benchmark gauge declining the most since August, amid concern improving U.S. economic data will spur the Federal Reserve to pare stimulus as soon as this month.
Treasury 10-year note yields fell from the highest in almost three months as investors weighed prospects for the Federal Reserve’s bond purchases after data showed the economy added more jobs than forecast last month.
U.S. stocks rose, halting a five-day slide for the Standard & Poor’s 500 Index, as investors weighed better-than-forecast jobs growth to gauge the strength of the economy and timing of Federal Reserve stimulus cuts.
The jobless rate dropped to a five- year low of 7 percent in November as American employers added more workers than forecast, boosting speculation the Federal Reserve may start scaling back stimulus as soon as this month.
Bill Gross, manager of the world’s biggest bond fund, said the pace of payroll growth in November signals there a 50 percent chance the Federal Reserve will begin tapering its monthly bond purchases this month.
Treasury 10-year note yields touched an 11-week high as reports showing the economy expanded and weekly jobless claims fell added to speculation the Federal Reserve will slow bond purchases as soon as this month.
Bill Gross is taking over management of the Pimco Unconstrained Bond Fund, one of the firm’s most important offerings as clients pull out of its main bond funds, with current manager Chris Dialynas leaving on a sabbatical.
Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said unprecedented monetary accommodation has lifted prices of stocks and bonds to levels that exceed measures of true value.