US real estate sector hit by soaring demand
The US real estate sector faced heavy selling pressure on Thursday, as Treasury bond prices declined, amid rising expectations that the Federal Reserve will raise interest rates this year. The market-implied odds that the Fed increases rates in December have crept higher throughout October, hitting nearly three-quarters on Thursday from 60 per cent at the start of the month, as data have reinforced expectations that economic output growth accelerated after a disappointing first half of 2016. “Combined with the ongoing uptrend in core inflation and the economy at full employment, the risks are rising that the Fed is falling behind the curve,” Torsten Slok, chief international economist at Deutsche Bank, said.
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