Federal Reserve Chairman Ben Bernanke may delay his plan to taper bond purchases past September, as investors expect, because of this week's surge in interest rates, according to UBS.
"If 10-year Treasuries are at 2.8, 2.9 percent in September, the chance of tapering will reduce to 50 percent at most," said Paul Richards, head of FX distribution at UBS. "I don't think that Bernanke is going to be held hostage to the bond market, and I'm a guy that's been calling tapering for three months."
The 10-year Treasury yield jumped almost to 2.9 percent this week after better than expected jobs data Thursday. A six-year low in jobless claims may signal an improving employment market.
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