Concern that a surge in U.S. bond yields will curb the expansion is overblown, says money manager James Paulsen. When coupled with gains in confidence, higher borrowing costs are a healthy sign for the world’s largest economy.
Unemployment will fall to about 7 percent in the fourth quarter, according to economists at five of the world’s largest banks, creating more confusion among investors about the Federal Reserve’s bond-buying plans.
Unemployment in the U.S. may fall faster than expected as baby boomers enter retirement, reducing the portion of people in the workforce, according to Drew Matus, senior U.S. economist at UBS Securities LLC.
The lowest inflation since the brink of the Kennedy-era economic boom in the 1960s is buying time for Federal Reserve Chairman Ben S. Bernanke to press on with the central bank’s $85 billion in monthly bond purchases.
Federal Reserve officials intensified efforts to curb a growth-threatening rise in long- term interest rates, seeking to clarify comments by Chairman Ben S. Bernanke that triggered turmoil in global financial markets.