Bond yields spike again as US GDP beats forecasts

Yields on 10-year treasuries have spiked back above 2.7% after US Q2 GDP data easily beat expectations, increasing the likelihood of a quantitative easing slowdown.

GDP came in at an annualised 1.7% in the second quarter, well above predictions of a 1% rise, following on from positive jobs data earlier in the day. Q1 GDP growth of 1.8% was revised down to 1.1%, but investors took the overall picture as a sign of an improving economy. That raises the possibility the US Federal Reserve may begin slowing down its asset purchase programme as soon as September. "With GDP growth accelerating and monthly employment gains still robust, we anticipate a reduction in those monthly purchases in September," said Capital Economics' chief US economist Paul A...